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Binance $5M Bounty Program Exchange Bounties Seek to Snuff After Ronin RON Crash

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Cryptocurrency exchange Binance unveiled a sweeping set of anti-corruption measures this week, including bounties worth up to $5 million, after accusations of insider trading related to a recent token listing. The incident involved the Ronin token, which powers the popular blockchain gaming network Ronin.

TLDR

Binance offered a $5 million bounty for information on potentially corrupt staff members after accusations that its listing process was being leaked.
The Ronin (RON) token plummeted 18% in the first hour after Binance listed it, sparking insider trading speculation.
Binance co-founder Yi He announced overhauls to the listing process, including stricter controls, leaks resulting in firings, and bounties up to $5 million for verified corruption information.
The incident echoed allegations in late 2022 that a Coinbase employee was tipping off associates about upcoming listings for profit.
He’s measures aim to stamp out corruption through bounties and threats, but may also be an overcompensation amid legal issues facing Binance’s founders.

The Ronin token (RON) had risen over 30% during the week leading up to its Binance listing announcement on February 5th. However, it plunged 18% just one hour after trading opened, sparking speculation that information had leaked ahead of time.

Binance co-founder Yi He stated that while the exchange’s listing announcements are encrypted, blockchain data showed users had discovered Binance was preparing to support Ronin. However, that explanation failed to temper accusations of insider trading.

感谢今天所有关心币安,热爱币安,支持币安的朋友们,也收到了很多建议,我都有认真一条条看。过去偶尔有关于币安上币信息泄漏的激烈讨论,通常是一些尚未发布代币的项目,社区为了保持热度过度宣传并不鲜见;但今天RONIN上币公告发布后RONIN价格下跌引发了社区激烈讨论,经过内部调查发现是之前集成公…

— Yi He (@heyibinance) February 5, 2024

Notably, this wasn’t the first such allegation Binance had faced. In late 2022, a Coinbase director speculated that Binance listings may be getting leaked early based on trading patterns from certain wallets. Those wallets bought tokens just before Binance listings and sold them immediately after for fast profits.

In response to the Ronin incident, Yi He unveiled sweeping anti-corruption initiatives offering bounties between $10,000 and $5 million for verified information exposing Binance staff members involved in illicit activities. She stated that earning bounties would be “much easier and more profitable” than engaging in corruption.

Binance also instituted stricter controls and policies around its listing process. For example, any future leaks will result in cancelled listings, while leaked info after announcements will extend pending listings. Additionally, employees involved in listings will face tighter oversight, including warnings and terminations for multiple offenses.

The exchange also threatened permanent blacklisting of any external crypto projects that hire former Binance staff fired for corruption. Yi He warned projects to conduct background checks with Binance before making any hires.

While Binance’s strong reaction aims to stamp out misconduct, some speculate it may be an overcorrection amid legal troubles facing its founders. Binance co-founder Changpeng Zhao remains in the U.S. awaiting sentencing after pleading guilty to money laundering.

Nonetheless, the $5 million bounty represents a bold deterrent against abuse of insider information. It echoes similar initiatives by other exchanges facing corruption issues, like Coinbase, which saw an employee sentenced to prison last year for tipping off associates about upcoming token listings.

As the crypto industry continues working to bolster trust and transparency, such crackdowns on unethical behavior will only accelerate. However, eradicating insider trading and corruption likely remains an uphill battle.

The post Binance $5M Bounty Program Exchange Bounties Seek to Snuff After Ronin RON Crash appeared first on Blockonomi.

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