Binance Fires Employee for $113,000 Insider Trading Gain, Imposes New Restrictions

Binance, one of the world's leading cryptocurrency exchanges, recently terminated an employee for engaging in insider trading. The incident came to light on March 23 when Binance's internal audit team received a complaint against a former business development employee of BNB Chain, who was then working in the Binance Wallet division. The investigation revealed that the employee had used confidential information from his previous role to make personal gains.

The employee in question was aware of an upcoming token generation event (TGE) for a popular project. Before the official announcement, he used multiple wallets to purchase coins from this project. After the announcement, he sold some of these assets, resulting in significant profits. Binance representatives clarified that the investigation did not find evidence of insider trading within the wallet team itself, as the division did not have a business relationship with the project in question and should not have had access to classified information.

In response to the incident, Binance suspended the employee and classified his actions as frontrunning, an illegal trading practice based on insider information. The exchange plans to seize all illegally obtained assets and hand the case over to the authorities. Additionally, four whistleblowers who reported the breach were rewarded a total of $100,000.

The crypto community speculated about the identity of the employee involved. Some users confirmed that the individual was Freddie Ng, who reportedly made over $100,000 on the UUU token. Ng allegedly spent around $6,000 to buy 24.1 million UUU tokens, which accounted for 2.4% of the total supply. During the price surge, he sold 6 million UUU tokens, making a profit of $113,000. The remaining 18.1 million UUU tokens, worth approximately $200,000, were still held in his nine wallets.

Many members of the crypto community expressed criticism towards Binance, highlighting the potential damage to the exchange's reputation and the trust built over the years. Binance has faced repeated accusations of insider trading in the past, and this incident has further fueled community concerns.

In response to the incident, Binance has imposed new restrictions on crypto asset investments for its employees. The exchange has limited the maximum investment amount to $5,000 per year. This policy does not apply to employees in the listing department of new crypto assets. A spokesperson for Binance confirmed that tighter restrictions are applied to staff who handle "sensitive" transactions, emphasizing that the company regularly reviews its staff policies to ensure that users remain at the center of their operations.

This is not the first time Binance has implemented such policies. In 2018, former Binance CEO Changpeng Zhao stated that employees were allowed to store cryptocurrency but needed permission to trade it, with a waiting period of up to 30 days before making a new trade. This rule had been in effect since the company's inception. However, the policy was tightened later, with a ban on trading in the futures market for all employees, including Zhao himself, in August 2023. Additionally, the waiting period before selling previously purchased crypto-assets was increased to 90 days. In February 2025, Zhao noted that the trading ban could lead to a poor understanding of users' needs among Binance managers.

The incident highlights the ongoing challenges faced by cryptocurrency exchanges in maintaining transparency and trust within the community. Binance's swift action in terminating the employee and implementing stricter policies demonstrates its commitment to addressing these issues. However, the exchange will need to continue to monitor and adapt its policies to prevent similar incidents in the future.