Binance and DFW Labs have denied that a market maker was involved in market manipulation through the exchange

What’s new? Crypto exchange Binance has fired the head of its monitoring department after his recommendation to remove market maker DWF Labs over market manipulation, WSJ reports, citing sources. Employees in the department said DWF manipulated the price of YGG and at least six other tokens, and conducted fictitious trades on Binance worth more than $300 million in 2023.

Material by WSJ

What else is known? Binance said the transactions discovered by the monitoring team were private and did not constitute manipulation. Binance also believes that the head of the monitoring team worked closely with DWF’s competitors, which was grounds for dismissal.

In 2022, Binance brought in a team of researchers who, according to the WSJ, found evidence of active manipulation of the crypto market by crypto exchange users. At the time, they recommended that several hundred users be removed from the platform for violating terms of use.

In late 2023, the group alleged extensive manipulation by DWF Labs, also recommending that the company be removed from the platform. In response, Binance launched an investigation into the watchdog group itself, which resulted in it claiming that the evidence gathered against DWF was irrelevant. A week later, the exchange fired the head of the watchdog group and then denied the request to remove the market maker.

In a comment to The Block, Binance rejected claims that its market surveillance program allowed manipulation through the platform. “We have a robust market surveillance framework that identifies and takes action against market abuse. Any users that breach our terms of use are off-boarded; we do not tolerate market abuse,” a spokesperson for the exchange said.

Binance also said it has blocked nearly 355 000 users with a total trading volume of $2,5 trillion over the past three years for violations of the platform’s rules.

Source: Twitter.com

“Market maker competition is fierce and our investigation team’s job is to be neutral and look at the evidence without any bias” the exchange commented on the employee’s dismissal.

Binance co-founder and head of the exchange’s venture capital arm Yi He also added that due to fierce competition, market makers sometimes initiate campaigns to discredit competitors. She emphasized that the exchange strictly monitors market makers and intends to report all real cases of market manipulation to law enforcers.

DWF also said that the accusations published in the press are unfounded and are the result of misrepresentation of facts: “We remain committed to supporting you and our over 700 partners across the crypto ecosystem.”

Source: Twitter.com

DWF previously invested an undisclosed amount in the Web 3.0 game Overworld from Binance-backed developer Xterio. As well, it funded the integration of the TON blockchain and the addition of support for its native Toncoin token on the institutional custodian platform Fireblocks and joined TON as a validator.