Binance launches $5 million bounty after $RON listing fiasco

Binance has initiated a bounty program, offering rewards of up to $5 million for credible information that could unveil any misconduct among its staff members. This decision came in response to allegations of insider trading, particularly concerning the process for new token listings.

The listing of the Ronin token (RON) on Binance on February 5 triggered significant scrutiny, as the token witnessed a notable surge of over 30% in the week leading up to the listing announcement. However, shortly after its listing on Binance, RON experienced a sudden decline of approximately 18%, culminating in a 26% drop within the same day.

The swift price movement raised suspicions of potential leaks, suggesting that traders might have gained early access to listing information. Binance’s co-founder, Yi He, acknowledged that certain users had access to blockchain data indicating the imminent listing of the token.

In response to the controversy, Binance has outlined plans to revamp its listing procedures to rebuild trust. These measures include implementing stricter controls on internal communications and enhancing monitoring of team members involved in the listing process. Employees found leaking information about upcoming listings will receive warnings for initial infractions, with repeat offenders facing termination.

The newly launched bounty program offers rewards ranging from $10,000 to $5 million for substantiated tips uncovering any corruption related to token listings or associated activities. Projects found hiring terminated Binance employees will be subject to permanent blacklisting. Binance is also reinforcing controls on external communications concerning listings and will nullify any listings affected by premature leaks.

While Binance underscores the security of its encrypted listing announcements, it acknowledges the risk of leaks that could potentially enable automated trading based on listing news. Enhanced technical surveillance aims to address this vulnerability.

This controversy follows previous allegations in January 2023 regarding the exploitation of leaks by trading bots to profit from token listings on Binance. Conor Grogan, a director at Coinbase, highlighted the presence of several wallets exhibiting a pattern of purchasing tokens shortly before listing announcements and subsequently dumping them once listed.

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