Binance employee accuses DWF Labs of market manipulation

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As a seasoned crypto investor with a keen interest in market manipulation and regulatory compliance, I find the allegations against DWF Labs concerning. The reported findings by Binance’s investigative team and the U.S. SEC lawsuit against Binance and its founder have shined a light on the need for transparency and accountability in the crypto space.

As a crypto investor, I’ve come across news that Binance‘s investigative team has uncovered alleged evidence of market manipulation by DWF Labs, a market making entity. This means that the team suspects DWF Labs may have used unfair practices to artificially influence the price of certain cryptocurrencies traded on their platform.

The Wall Street Journal revealed that during an internal probe, DWF Labs’ purported fabricated trades were uncovered with the aid of specialized software. When this information was brought to DWF Labs’ leadership, they terminated the head of their oversight department in response.

As a crypto investor, I’ve noticed that Binance and its founder, Changpeng Zhao, faced a lawsuit from the U.S. SEC in 2023. In response, I’ve observed that Binance has pledged to work diligently towards constructing a robust and trustworthy platform. To achieve this goal, they have brought on board investigators with expertise in the conventional financial sector.

In the course of the investigation, the team uncovered VIP clients engaging in market manipulation activities. According to the findings in the report, these elite traders were responsible for approximately two-thirds of all trading transactions conducted on the platform.

Further information has emerged. Binance detected transactions involving specific cryptocurrencies in certain accounts. However, when DWF Labs were queried about who managed these addresses, there was reportedly no reply from their end.

In the report from 2022, DWF Labs encouraged prospective customers to adopt aggressive trading strategies in order to boost token prices and generate false trading activity on cryptocurrency exchanges. The Wall Street Journal also disclosed that a market maker admitted to generating artificial trading volume for one of its clients.

DWF Labs called the accusations unfounded and that it distorted facts.

To our esteemed collaborators: It is important to set the record straight regarding the unsubstantiated claims that have been circulating in the media. At DWF Labs, we uphold the principles of honesty, openness, and morality in all our dealings. We remain dedicated to fostering a successful partnership with you, along with over 700 other partners.

— DWF Labs (@DWFLabs) May 9, 2024

Binance made a remark in an article that it strictly follows market regulations and prohibits misuse. As per data, around 355,000 users were disconnected by the exchange over a three-year period, with a total transaction value exceeding $2.5 trillion, for breaching the terms of use.

In reaction to the Wall Street Journal’s inquiry, we confirm our robust market monitoring protocol. We have zero tolerance for market manipulation.

— Binance (@binance) May 9, 2024

In April 2023, there were allegations against the market maker for selling off tokens from its portfolio projects, valued at a minimum of $65 million. The controversial projects involved an unsuccessful ICO fundraising effort for a project that failed to materialize, mismanagement of investments leading to losses, and associations with OneCoin. OneCoin’s deceitful cryptocurrency scheme had defrauded its users of approximately $4.4 billion.

1/ Who the heck is DWF Labs?

In the last couple of months, they have been everywhere, throwing ridiculous checks at everyone from legit projects to dead ones.

I dug a bit into on-chain data and other resources, and it doesn’t look good.

— Nay (@gmnay_) April 10, 2023

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2024-05-09 17:04