DWF Labs denied that this was baseless information, however, Binance said that their investigation team worked with "integrity" and reported based on evidence.
DWF Labs accused of market manipulation on Binance
According to sources from the Wall Street Journal (WSJ) , from 2022 - 2023, the Binance exchange hired a team of leading investigators to search for evidence of market manipulation on the exchange.
BINANCE PLEDGED TO THWART SUSPICIOUS TRADING—UNTIL IT INVOLVED A LAMBORGHINI-LOVING HIGH ROLLER
— *Walter Bloomberg (@DeItaone) May 9, 2024
Binance's Investigators found that DWF manipulated the price of YGG and at least six other tokens, and made over $300 million in wash trades in 2023, https://t.co/Tc7GLE51BH
Notably, the Binance monitoring team discovered that DWF Labs - one of the leading investment funds and market maker (MM) in Web3 projects - was manipulating the price of YGG Token and at least 6 currencies. other encoding.
Not only that, DWF Labs also had the act of "wash trading" more than 300 million USD in volume and selling nearly 5 million Token of all types during two market recoveries around the above mentioned time period.
nice progress! pic.twitter.com/BHXi7ZumNG
— ZachXBT (@zachxbt)August 7, 2023
To overcome market manipulation, the investigation team asked Binance to issue a trading ban for violating users from the exchange, including DWF Labs' accounts.
After receiving the information, Binance said that the transactions detected by the monitoring team were private and could not constitute price manipulation . In addition, the evidence presented by the monitoring team is not enough to confirm the wrongdoing of DWF Labs.
A week later, Binance announced the dismissal of the Head of the Supervisory Team on the grounds of having a close "off-the-record" relationship with Wintermute - a rival of DWF Labs, which had a "war of words" in mid-2023. At the same time, refuse the request to remove the DWF Labs trading account.
Binance Investigators found that DWF manipulated the price of YGG and at least six other tokens and conducted more than $300 million in wash trading in 2023. DWF sold nearly 5 million tokens in two batches near the peak.
— Wu Blockchain (@WuBlockchain) May 9, 2024
Binance stated that the false transactions discovered by…
Also according to WSJ, one of the biggest successes of the Binance monitoring team is detecting the price manipulation behavior of the TRON Foundation and removing the trading account of the blockchain company founded by Justin Sun - a character who is also in charge. involved ina lawsuit by the SEC on charges of illegal securities offering. The types of securities that the SEC specifically named are the two currencies TRON (TRX) and BitTorrent (BTT) of the TRON system.
In addition, the WSJ report also "revealed" that the monitoring team discovered that Binance had a trading account used to trade a number of cryptocurrencies . When they asked the question "who manages the Binance internal trading account", they did not receive an answer.
WSJ said that the total volume of the Binance platform is up to 2/3 of the Volume from VIP customer accounts. In particular, DWF Labs is one of the highest-ranking VIP members of the exchange - meaning it owns a volume of at least 4 billion USD/month.
With level 9, Binance VIP accounts will enjoy preferential trading fees from only 0.009 - 0.019% for Spot. Futures transactions will be in the range of 0.0153 - 0.017%, even free of transaction fees.
Transaction fee table by each level for VIP customers on Binance.
Immediately after the news, Binance affirmed that its monitoring program is "integrated", neutral, only reports based on evidence with investigations, and does not tolerate manipulation of market value. with any individual or entity, including market makers.
The exchange wants to ensure there is healthy competition in the cryptocurrency space from MMs, and Binance will always be ready to fight to protect users from manipulation.
In the last 3 years, the exchange has removed nearly 355,000 user accounts with a total volume of more than 2,500 billion USD for violating Binance's manipulation terms.
In response to WSJ, we affirm our strict market surveillance program. We do not tolerate market abuse.
— Binance (@binance)May 9, 2024
Over the last three years, we have offboarded nearly 355,000 users with a transaction Volume of more than $2.5 trillion for violating our terms of use.
Market maker…
In response to the accusations of "getting their noses" at them, DWF Labs declared that this news is baseless and distorts the truth.
The market maker affirms itself to always operate with the highest standards of transparency and ethics, and is committed to always supporting users and more than 700 partners across the cryptocurrency ecosystem based on this criterion.
To our valued partners: We want to clarify that many recently reported in the press are unfounded and distort the facts.
— DWF Labs (@DWFLabs)May 9, 2024
DWF Labs operates with the highest standards of integrity, transparency, and ethics, and we remain committed to supporting you and our over 700… pic.twitter.com/aydp1hoham
Allegations of price manipulation have long been a "prominent" issue in the cryptocurrency sector, with Binance also being involved in a similar incident in 2021 . In addition, there are some other prominent names in the past that can be mentioned such as:
- Tether and Bitfinex were sued for market manipulation and concealment of illegal funds.
- Jump Trading was sued for manipulating the price of TerraUSD (UST) to profit 1.3 billion USD.
- Wintermute with accusations of wash trading and "subsidizing" Celsius 's CEL Token .
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