Binance Investigates ‘Rat Trading’ Complaint, Takes Action

Binance, one of the world’s leading cryptocurrency exchanges, has announced the results of an internal investigation into allegations of staff misconduct, revealing the misuse of insider information by a former employee.

Binance Employee Accused of ‘Rat Trading’

On March 23, 2025, Binance’s Internal Audit team received a complaint that a staff member had engaged in front-running trades, using insider knowledge to secure improper profits. The exchange immediately initiated a thorough investigation, which has now concluded in its recent X post.

Investigation Findings on Staff Misconduct in Trading

Dear Binance Users and Community Members,

On March 23, 2025, Binance’s Internal Audit team received a complaint alleging that one of our staff members engaged in front-running trades using insider information to gain… pic.twitter.com/SVVvu4rX1x

— Binance Wallet (@BinanceWallet) March 25, 2025

The employee in question was part of Binance’s Wallet team, a division that does not have any connection to the project in question. However, the investigation revealed that the employee had previously worked as part of the Business Development team at BNB Chain, where he gained valuable insights into upcoming projects, including a planned Token Generation Event (TGE).

Using knowledge from his former position, the employee purchased a substantial amount of the project’s tokens before the public announcement, then sold a portion of them shortly after the announcement, realizing significant profits. This action has been classified as front-running, a serious violation of Binance’s internal policies, as it involved trading based on non-public information.

As a result of the findings, Binance has taken immediate action:

1. The employee has been suspended pending further disciplinary measures.
2. Binance has confirmed that it will cooperate with relevant authorities and take legal action in line with the laws of the employee’s jurisdiction. Additionally, any associated assets will be handled in full compliance with applicable regulations. 

Binance also announced that it has rewarded those who reported the misconduct through its official whistleblowing channel. A total of $100,000 USD will be equally distributed among three whistleblowers, whose valid reports led to the investigation. The company encourages further transparency by reminding the community to submit any future reports exclusively through Binance’s official whistleblower email ([email protected]) to ensure proper reward distribution.

The company also clarified that while some reports were publicly shared on the social media platform X, only submissions through the official channel qualify for the reward, with an emphasis on protecting the identities of those who report misconduct.

In its announcement, Binance reaffirmed its commitment to transparency and integrity. The company emphasized its zero-tolerance policy toward any form of misconduct, particularly when it comes to insider trading.

Also Read: Binance Co-founder He Yi: Interests of Users and the Platform Are Completely Aligned

Written by
Ritu Lavania

Ritu Lavania is a versatile Web3 content creator with over three years of experience in the crypto space. She is part of the team at CryptoNewsZ, where she writes insightful and engaging content. She has also contributed to TheCryptoTimes and The Coin Edition, where her work has been well received by the crypto community. Skilled in research, creative writing, SEO, and cross-functional collaboration, she creates content tailored to diverse audiences. Passionate about education, she dedicates time to teaching kids and expressing herself through poetry. Always eager to learn, she continuously explores new trends in blockchain and digital assets. She believes in the power of storytelling to make complex crypto topics more accessible and engaging for readers worldwide.