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Binance Refutes Claims of Market Manipulation by DWF Labs

May 9, 2024 at 12:37

Binance has publicly refuted allegations suggesting DWF Labs engaged in market manipulation.

Recent allegations have resurfaced against DWF Labs, involving claims of extensive wash trading activities amounting to $300 million during 2023. An anonymous individual, purportedly a former Binance insider, disclosed these findings to The Wall Street Journal in a report dated May 9.

Responding to these allegations, a Binance spokesperson dismissed the claims, telling Cointelegraph:

“Binance categorically denies any claims that our market surveillance system has allowed any form of market manipulation on our platform. Our comprehensive market surveillance setup is designed to detect and address any market abuses. We have a strict policy against market manipulation, and any user found in violation of our terms is immediately removed from our platform.”

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The Wall Street Journal’s report also accused DWF Labs of manipulating the prices of the Yield Guild Game (YGG) token and at least six other cryptocurrencies in 2023. Binance, however, maintains that such activities would be detected and prevented by their surveillance programs.

Binance continues to enforce its policies strictly, having removed nearly 355,000 users over the past three years, who were involved in transactions totaling over $2.5 trillion, for breaches of its terms of service related to market manipulation, as confirmed by a Binance spokesperson to Cointelegraph.

The effectiveness of Binance’s market surveillance has also been supported by an independent study conducted by Inca Digital, which reported finding “minimal signs of anomalous trading activities,” underscoring the robustness of Binance’s monitoring systems.

DWF Labs, a Web3 investment and market-making firm, first faced market manipulation accusations in September 2023 after its unusually high on-chain transaction volumes drew attention from the crypto community.

Wintermute, another market-making firm, was one of the initial entities to charge DWF Labs with market manipulation. During a September interview at Token2049, Wintermute co-founder Yoann Turpin criticized DWF Labs, stating they “are not market makers in our sense” and mislead the community by misrepresenting certain transactions as investments.

DWF Labs’ co-founder, Andrei Grachev, has vehemently denied these accusations, defending his firm’s operations and transparency.

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