Inside Binance and DWF’s alleged market manipulation saga – What’s going on?

DWF reportedly made over $300 million from market manipulation at Binance
Binance allegedly fired an employee who flagged DWF’s shady tactics

As an experienced financial analyst, I find the allegations against DWF at Binance deeply concerning. The reported market manipulation scheme, including wash trades and pump and dump tactics, is a clear violation of trust and fair trading practices. Furthermore, the alleged dismissal of the surveillance team’s report and subsequent termination of its lead only adds fuel to the fire.

It has been alleged that one major player in the cryptocurrency marketmaking scene, specifically DWF, engaged in manipulative practices on the Binance exchange, utilizing the BNB token.

Based on a recent Wall Street Journal article, I’ve learned that allegations have surfaced against DWF, suggesting they gained over $300 million in questionable ways from Binance. Specifically, the report implies that DWF engaged in dubious activities to amass such substantial earnings with this cryptocurrency exchange.

According to ex-employees of Binance, the platform’s investigators uncovered evidence that DWF manipulated the prices of YGG (Yield Guide Games) and at least six other tokens in 2023. This resulted in approximately $300 million in fraudulent trades, known as wash trades, which violated Binance’s terms of use.

As a researcher studying market manipulation, I have come across harmful practices such as pump and dump schemes and wash trades. These tactics aim to artificially inflate or deflate the price of an asset for personal gain, ultimately threatening the integrity of trading platforms. In response to this discovery, Binance’s market surveillance team recommended removing DWF from their VIP list. This action serves to maintain the trustworthiness and fairness of the exchange.

Binance reportedly fired its surveillance team lead

As an analyst, I’d like to highlight that according to the Wall Street Journal’s report, it was mentioned that the surveillance team’s findings were dismissed, and their leader was terminated just a week after submitting their DWF assessment. It seems that disregarding surveillance reports when they contradicted major clients has been a common practice.

For its part, DWF distanced itself from the allegations and stated,

As a factual analyst, I would like to set the record straight regarding certain allegations that have been circulating in the media recently. Contrary to some reports, these claims lack substantial evidence and misrepresent the truth.

Andrei Grachev, Managing Partner at DWF, was quick to downplay the allegations too, stating,

“We put in a lot of effort, strive for excellence, and grow bigger with each passing day. Some people may be displeased by this, but we continue to build and move forward. Let’s go!”

In addition to serving as a market maker, DWF Labs has financially supported a diverse array of cryptocurrency initiatives, according to information from CoinMarketCap.

It’s worth noting that some cryptocurrency market observers aren’t taken aback by the accusations of market manipulation against DWF. One commentator remarked,

“Its no secret- Big exchanges and their affiliates trade against retail”

The accusations provide additional complexity to the regulatory hurdles Binance has encountered during the past year. Of significance, the platform reached a settlement and forfeited $4 billion for violating U.S anti-money laundering regulations in the previous year. Subsequently, in 2024, its former CEO, “CZ,” was given a four-month sentence.

The reports did not significantly impact BNB‘s price action, as the cryptocurrency continued its range-bound trading between $500 and $615. This sideways movement, which started in mid-March, reflects a lack of clear direction for BNB’s price at this time.

2024-05-10 11:03

Binance reportedly fired its surveillance team lead

Read More