Hours after the Ethereum sidechain Ronin network saw its RON cryptocurrency listed on the Binance exchange, the token plunged by as much as 25%. Binance’s co-founder Yi He has explained the cause of the downtrend while adding measures to mitigate a similar occurrence in the future.
Yi He Hints at Insider Trade
Amid a flourishing bullish trend for the Ronin ecosystem, Binance announced its intention to list the game-centric altcoin. The exchange’s announcement yesterday revealed that the token listing will be accompanied by a seed tag, a type of assessment for highly volatile cryptocurrencies.
Instead of bringing a price surge due to increased demand, the RON cryptocurrency saw a rapid price slump of over 25%, bringing its current trading price to $2.54.
Source: CoinStats
Binance’s boss, Yi He, explained via a series of tweets that an insider trade might have occurred. Insider trading, often an illegal act, is the use of confidential information to buy or sell a crypto asset. The information, usually obtained from employees, gives the trader an unfair advantage over other traders.
Yi He acknowledged that Binance had previously faced allegations of insider trades. Then, she added that an “internal investigation” suggests a possible insider trading.
“Today, the price drop of RONIN after the announcement of RONIN’s listing triggered heated discussions in the community. Discussion, after internal investigation, it was found that the public chain [Ronin chain] was previously integrated to retrieve tokens for users, and it was detected by the outside that it was collected on the chain,” she explained.
Binance Introduces $5M Reward Program to Report Insider Trading
While RON is now listed on the leading crypto exchange, the Binance boss outlined some adjustments to downsize the chances of such insider trading occurring in the future.
Among the listed adjustments is an attractive reward of $10,000 to $5 million to individuals who verify that Binance employees are corrupt and involved in insider trading.
Another step introduced is the adjustment of Binance’s external partners. These partners are responsible for communicating with crypto project founders and investors. If an information leak is noticed, the token listing will be canceled.
