Global leading blockchain ecosystem and digital asset exchange, Binance has taken to its Twitter page to debunk accusations related to the OSMO listing by WuBlockchain. In a recent thread on Twitter today, 31st of October, Binance refuted the allegations of front-running its OSMO listing.
Last week, the popular crypto reporting platform WuBlockchain released a tweet suggesting that the OSMO listing on Binance may have been front-run due to insider trading. On the 28th of October, WuBlockchain tweeted:
“One day before Binance announced the listing of OSMO, an address (osmo19muml8sjpnecnm8geul4l3zfju24l04mpuppy7) bought 2,029,846 OSMOs at $1.34, sparking discussions about “insider trading”.
At the time of the tweet, Binance responded that it was investigating the situation. However, Binance has now come out to provide a detailed response to WuBlockchain’s allegations, stating that it “always takes these sorts of accusations from the community seriously”.
The New OSMO and Its Price Spike
The term “front-running” in crypto refers to a process whereby someone uses technology or market advantage to get prior knowledge of upcoming transactions and exploits the information to make trading profits.
Barely 24 hours before Binance announced the listing of its new trading token Osmosis (OSMO), an unknown wallet address purchased 2,029,846 OSMO tokens triggering concerns of a likely crypto insider trading. Within three hours of the listing, OSMO surged by 29%, yielding about 25% rewards for traders. Due to the spike in price, the address in question garnered about $2.7 Million in gains, a rather suspicious amount.
However, Binance has provided clarity on the large purchase stating that the transaction was misinterpreted and that the tokens were traded for ATOM before Binance’s listing.
Reacting to WuBlockchain’s accusations, Binance stated that its global security team “immediately launched an internal investigation and concluded that the data presented on the Osmosis blockchain explorer was misinterpreted.”
“We found that a large amount of OSMO was bought ~1 day before the listing, but all tokens were quickly traded for ATOM before it was announced that OSMO would be listed on Binance”. Binance explained.
Analysing the trade in question with screenshots, Binance stated that the process involved trading from USDC to OSMO to ATOM. Furthermore, Binance revealed that the address that made the huge purchase still holds OSMO but made the initial purchase back in Nov 2021.
Binance Proves That the Suspected OSMO Purchase Is Legitimate
Having considered the various factors involved with the trade, Binance concluded that the purchase was a legitimate transaction rather than in-house trading. “Therefore, the conclusion of our investigation is this was a false flag, since the large purchase of OSMO was sold before OSMO’s listing announcement on Binance. These were legitimate transactions, not insider trading”. Binance wrote.
Rounding up its Twitter address, Binance applauded its community members that quickly flagged the issue. According to the thread, Binance said, “We take these whistleblower cases extremely seriously and ask that you continue to flag any behavior that seems abnormal”.
“It is this community supervision that has made Binance what it is today. Market integrity and fair, transparent service for our users is our top priority”.