IMO: The alleged insider trading with BOME would make me rule it out as a viable investment at this time. There is too much uncertainty and the risk of loss outweighs any potential benefit.

You might recall, Binance made headlines over the weekend by adding the $BOME token, a #SolanašŸš€ ( $SOL )-based mem token, tagged with "seed." I told you not to trade over the weekend! But hey, did you make some emotional purchases anyway? That's why I'm here, to give you the full picture of what's happening with this cryptocurrency.

The ā€œBOME insider tradingā€ incident

Following this announcement, there arose speculation regarding potential insider trading, spurred by a significant purchase of $2.3 million worth of SOL on Binance the day preceding the listing. Later, the same individual used these tokens to acquire 314 million BOME from their off-exchange wallet at a rate of $0.0074 per token.

Amid discussions surrounding the alleged "BOME insider trading," Binance swiftly responded with a statement addressing the situation:

ā€œWe have recently noticed discussions in the community about Binance's so-called ā€œBOME insider tradingā€ incident. We take this information very seriously and immediately initiated an internal investigation based on relevant leads.

According to our preliminary research results, the person mentioned in the relevant information does not have any connection with Binance.

We sincerely appreciate everyone's continued interest and monitoring of Binance. The community's suggestions are very important to us, so we promise to continue to investigate thoroughly to ensure transparency and fairness of the facts.

ā€œIf you have any information regarding currency listing and other corruption and we confirm that Binance team members are corrupt, we will anonymously offer you a reward of between US$100,000 and US$5 million.ā€

Binance acknowledged the controversy surrounding the incident and promptly initiated an internal investigation.

Emphasizing that Binance personnel were not involved in the incident, the exchange pledged a reward ranging from $100,000 to $5 million for anyone providing information leading to the uncovering of this incident.

As of the time of writing, BOME continues to be traded at $0.010 and falling šŸ‘Ž.

How this bad news from Binance impacted the rest of the markets that trade BOME

Well, it hit pretty hard... Up until the 17th, I told my followers that if the price didn't break the FIBO level of 0.5, where we were retesting that floor, it could survive as a project. However, in the following hours, to be exact on the 18th at 06:00 (UTC-3), the price broke that Fibonacci level and the selling pressure is showing in full force. BOME has a clear downtrend now, and we gotta re-analyze everything, see if there are any dead cat bounces or real recovery to get back on track (which I doubt after reading the news in terms of fundamental analysis).

Thoughts on the news of alleged insider trading with BOME on Binance

As an investor in cryptocurrencies, this news about BOME on Binance would be a major red flag for my investment analysis.

Here's why:

  • Suspicion of abuse:Ā The massive purchase of BOME just before its listing on Binance raises suspicions that someone with inside information took advantage of the situation.

  • Uncertain volatility:Ā The suspicion of insider trading creates great uncertainty about the real price of BOME. If it is discovered that there was abuse, the price could plummet.

  • Damaged trust:Ā Binance's investigation is positive, but the shadow of doubt about the fairness of the exchange damages investor confidence.

How it affects my investment analysis

Considering the above, BOME would be a much riskier investment:

  • Low profit potential:Ā The large initial price jump due to possible manipulation could limit the real profit margin.

  • High risk of losses:Ā If the price falls due to the investigation or loss of confidence, the losses could be significant.

Stay informed and invest wisely

Check out my other posts ( @LocademiaCripto ) , they're pure gold šŸ¦„āœØā­

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Source

  • CMC - https://coinmarketcap.com/community/articles/65f82b74faedbf349e3f608f/

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