One trader made $1.4 million from 16 possible insider trading scenarios on Binance.

Binance CEO Changpeng 'CZ' Zhao said the exchange has frozen $2 million associated with a crypto address linked to an alleged insider trader.

In a Twitter thread on March 28, FatMan Terra stated that an anonymous individual had made a seven-figure profit by getting ahead of the curve on multiple altcoin listings on Binance. Citing on-chain data, the crypto influencer detailed how the trader’s “secret operation” was exposed.

Insiders allegedly made $1.4 million from insider trading

According to a January report cited by FatMan Terra, there were 16 possible cases of insider trading on Binance, with traders making a cumulative profit of $1.4 million.

In one case, an insider bought Fraud Share’s FXS on Uniswap in small batches over six days after injecting $53,000 into the wallet “0xd23.” The trader would later sell all of his holdings for a profit, three days after Binance listed the last purchase of FXS tokens.

In another case, a trader bought 131 ETH worth of Virtua ( TVK ) two days before its Binance listing. After the token’s value rose, the trader made 277 ETH from the token sale.

The report cites similar transactions where traders have made significant profits from different altcoin listings.

While the identities of the traders remain unknown, their trading patterns suggest they have inside information about these Binance listings.

Binance Response

CZ acknowledged FatMan Terra’s tweet, adding that the exchange froze the funds prior to his Twitter post. CZ added:

"We're also always fighting potential leaks etc. You're welcome to point them out in the future as well. Help us all."

FatMan Terra also noted:

“Insider trading causes many profitable trades to become unprofitable (e.g., an otherwise breakeven trade may result in a 10% loss due to exploitative insider activity), and traders never find out what happened to them.”

Meanwhile, Binance’s chief strategy officer Patrick Hillman previously said the exchange has “an internal security team that monitors multiple platforms for possible employee trading activity, and it has a zero-tolerance policy.”