Bitcoin

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

2 Mins read

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.

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.



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