A major cryptocurrency exchange has placed a member of its wallet team on suspension while indicating that it may pursue additional legal measures following an internal inquiry into claims of insider trading.
The wallet division conducted an investigation starting on March 23 after receiving allegations that an employee utilized confidential information to execute front-running trades for unjust profits. In a post on March 25, the company declared that its initial findings suggested a new staff member, who had joined just last month, was suspected of leveraging information from a prior business development role at another blockchain organization to front-run transactions involving a project token.
The investigation revealed that the employee was aware of an imminent Token Generation Event (TGE) for the project, anticipating a substantial surge in community interest. The staff member allegedly employed several linked wallet addresses to buy a hefty quantity of the project’s tokens prior to the public announcement, and afterward, sold off part of the holdings quickly to secure significant profits.
The company accused the individual of engaging in front-running based on private information acquired from a previous employment role, which violated company policies. The employee has been suspended immediately while further disciplinary measures are considered, and the exchange has committed to cooperating with relevant authorities for potential legal action.
Although the company did not disclose the staff member’s name, it mentioned that circulating allegations on social media had triggered the investigation.
Earlier in the week, several users on the platform pointed to a former operations manager of the relevant blockchain organization—whose LinkedIn profile indicates recent employment with the wallet’s business development team.
One user noted that one of the wallets linked to the trades has seen a profit of $82,400 from the implicated token, which involved transactions with a wallet associated with a handle previously shared by the suspended employee.
The exchange did not provide an immediate comment upon inquiry, and attempts to reach the suspended employee were made.
In related news, the wallet team expressed appreciation for public vigilance but clarified that it would only recognize reports sent to a specific whistleblower email to safeguard the informants’ anonymity. The team announced plans to distribute a total of $100,000 among four anonymous whistleblowers who submit reports through the designated channel.