Binance, a leading cryptocurrency exchange, and DWF Labs have responded to a recent report by the Wall Street Journal (WSJ) that alleges market abuse. Both companies have stated their zero tolerance for such activities.
According to the WSJ report, some of Binance’s “VIP clients” were accused of engaging in wash trading and market manipulation, with a monthly trading volume of $100 million. The report also claimed that these VIP clients accounted for two-thirds of Binance’s overall trading volume.
To address these allegations, Binance established a surveillance team in 2022 to uncover any fraudulent activities within the exchange, including market manipulation. During the investigation, the team recommended the removal of hundreds of users, including DWF Labs, a prominent cryptocurrency firm. The WSJ report alleged that DWF Labs manipulated token prices, such as Yield Guild Game (YGG), and conducted $300 million in wash trading on Binance.
However, the report also claimed that Binance did not take any action on the findings but rather fired the head of the surveillance team a week later. Speculations arose that the team lead was collaborating with DWF Labs’ competitors, leading to his dismissal by Binance’s compliance unit.
In response to these allegations, Binance published a post emphasizing its zero tolerance for market abuse. The exchange stated that it has a strict market surveillance program and has removed nearly 355,000 users over the past three years for violating its terms, representing $2.5 trillion in trading volume. Binance highlighted that its compliance team conducts an unbiased analysis of evidence, despite the intense competition in market making. The exchange also expressed its commitment to fair competition and protecting users from market manipulation.
DWF Labs also responded to the report, dismissing it as baseless and distorting facts. The company asserted that it operates with the highest standards of transparency, integrity, and ethics.
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