Binance fired its head of investigations after he identified market manipulation by market-making firm DWF Labs, reports The Wall Street Journal. The investigation found that “VIP clients” trading over $100 million monthly were involved in illegal “pump-and-dump” and “wash trading” schemes.
The investigators reported that DWF manipulated token prices through fake trades worth $300 million in 2023. However, Binance deemed the evidence insufficient and dismissed the investigation head a week later. The special investigation unit, formed in 2022, had previously uncovered multiple market manipulations, leading to the closure of hundreds of accounts.
Binance claims to have closed 355,000 accounts with a total trading volume of $2.5 trillion over the past three years for rule violations. This incident sparked debate among crypto enthusiasts about the need to hold manipulators accountable. Despite criticisms, market-making is crucial for exchanges, significantly impacting profits.
