You can check the website statistics yourself or request them from us at [email protected]
On this platform, only organic high-quality traffic
Bitcoin
$ 30,725

Insider Trading Rampant in Crypto Market, According to Ex-Goldman Technologists

According to blockchain analysis company Solidus Labs, there’s a high occurrence of insider trading prior to the listing of new ERC-20 tokens on centralized exchanges (CEXs).

Solidus Labs, in a report released on Wednesday, revealed that by analyzing data since January 2021, they identified unusual trading patterns suggesting insider trading in advance of major CEX listings for ERC-20 tokens in about 56% of the examined cases.

ERC-20 tokens, built on the Ethereum blockchain, are among the most frequently generated types of tokens.

It’s worth highlighting that ERC-20 tokens are typically available for trading on decentralized exchanges (DEXs) like Uniswap even before making their debut on CEXs.

DEX transactions allow users to trade without revealing personal identification details. This privacy feature provides an avenue for insiders to discreetly accumulate tokens ahead of a listing, information about which may not yet be available to the general populace.

Upon announcement of a token listing, it’s a common trend for the token’s price to surge. Insiders, having pre-emptively acquired these tokens, often capitalize on this price jump by selling their holdings, thus securing a profit.

Addressing this concern, Chen Arad, co-founder of Solidus and a former associate at Goldman Sachs, commented to Bloomberg, “If you can’t trust the legitimacy of more than half the tokens being listed, it undermines the efficacy of the market.”

He further emphasized the importance of addressing this issue, stating, “Rectifying this is crucial for propelling cryptocurrency to greater heights.”

From an examination of 234 ERC-20 token listing announcements, Solidus Labs identified questionable patterns in 411 trades, believed to be associated with over 100 insiders.

These listing announcements pertained to three of the globe’s most prominent cryptocurrency exchanges. The analysis further spotlighted over 50 entities that seemed to have engaged in dubious trades in close proximity to the token listing announcements on these exchanges.

The study underscored that a significant portion of this questionable activity was recurrent insider trading.

Market manipulation strategies, like insider trading, along with other tactics such as pump-and-dumps and wash trading, have historically been pervasive issues in the cryptocurrency arena.

Smaller, more centralized crypto projects are particularly vulnerable to such manipulative activities. In contrast, larger, more decentralized digital currencies like Bitcoin (BTC) tend to be more resilient against these malpractices.

Related Posts

Leave a Reply

Confirm now and stay with our news

What we write about

I want to save money. Will cryptocurrency work?

Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

Every cryptocurrency has two main components: the units of digital exchange called “coins” and the network within which the exchange takes place. These units can be transferred between wallets and exchanged on exchanges. The networks in which these coins exist are called blockchains, which translates to “chains of blocks.”

Latest Articles

Winklevoss Twins Invest $4.5M in Crypto Podcaster Peter McCormack’s Football Club
15.04.2024By
Investor Caution Persists as Digital Asset Investment Products See $126M in Outflows
15.04.2024By
Bitcoin Shows Resilience Compared to Broader Crypto Market Despite Sell-Off: Fineqia
15.04.2024By

Latest news

Winklevoss Twins Invest $4.5M in Crypto Podcaster Peter McCormack’s Football Club
15.04.2024
Investor Caution Persists as Digital Asset Investment Products See $126M in Outflows
15.04.2024
Bitcoin Shows Resilience Compared to Broader Crypto Market Despite Sell-Off: Fineqia
15.04.2024
DeFi-Focused Berachain Raises $100M in Funding Round Led by Brevan Howard Digital
15.04.2024
Hong Kong SFC Approves Spot Bitcoin and Ethereum ETFs as Market Rebounds
15.04.2024
Uniswap Labs Implements Fee Increase to 0.25% on Mainnet and Layer 2 Swaps
14.04.2024
Crypto Lawyer John Deaton Is Outraising Elizabeth Warren In Election Campaign
13.04.2024
Concerns Raised Over China’s Influence on US Bitcoin Mining Infrastructure
13.04.2024
VeChain Teams Up with UFC to Tokenize Fighter Gloves, Community Reacts
13.04.2024
Australian Crypto Mining Companies Collapse into Liquidation Owing 450 Investors
13.04.2024