Some crypto traders have seemingly been cashing in on insider knowledge to make major returns on market news, the Wall Street Journal reports citing analysis from software firm Argus, which offers companies tools to manage employee trading.
Anonymous wallets buy up tokens right before they are listed and sell shortly afterward.
One crypto wallet nettd a USD 140k bottom line (marking a 40% return) by acquiring large sums of a digital coin in the days before it was listed on crypto exchange Binance, before selling again as soon as the token was listed.
The wallet has done the same with at least three other tokens, according to the data. This comes as crypto exchanges face increased regulatory scrutiny over transparency, as retail users book major losses as markets are hit by a wider selloff.
Public data suggests that several anonymous crypto investors profited from inside knowledge of when tokens would be listed on exchanges.
Over six days last August, one crypto wallet amassed a stake of $360,000 worth of Gnosis coins, a token tied to an effort to build blockchain-based prediction markets.
On the seventh day, Binance, the world’s largest cryptocurrency exchange by volume, said in a blog post that it would list Gnosis, allowing it to be traded among its users.
Bitcoin and its peers should theoretically trade independently of mainstream financial markets, but have largely shown themselves to be correlated with other risk-sensitive assets like stocks, and especially tech stocks over the past year.
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