Good day everyone,
I hope you are all well and having an excellent week, welcome to CryptoGod-1’s blog on all things crypto. In this post I will be looking at the fallout from the recent Ronin and Binance 'insider trading' issues which has sparked outrage in the crypto community.
Binance in Trouble over RON
It has been discovered that the Binance exchange was involved in the recent plunge in the price of Ronin (RON) after it was listed on the exchange. The market experienced significant price action around Ronin Network’s RON token after Binance announced it was listing the token on its exchange. The RON token is of the gaming-focused blockchain of the same name and it saw a price gain of over 30% and towards its all-time high, in the week leading up to the announcement. However, the token fell by 18% in the hour after Binance made the announcement that it was to list the token due to a bout of profit-taking, and it has continued to fall since.
For reference, the token hit its all-time high price on the 27th of January 2022 at a price of $4.29. The token hit a high of $3.49 on the 5th of February, but as shown in the RON token chart from CoinGecko, the price crashed heavily after. It has since rebounded slightly, but sits in around the $2.75 mark at the time of writing.
The announcement of the trading pairs for RON was made on February 5th at 13:30 UTC, and the momentum of the rising price of RON saw daily active users on the Ethereum sidechain spike. The initial euphoria wore off and the sell pressure dragged the tokens price back down in a matter of hours. The Ronin Network was purpose-built for gaming applications and launched by Sky Mavis, the same company who launched the popular blockchain game Axie Infinity. This was done to help scale Axie’s rapid user growth as it was overwhelming the likes of the Ethereum network.
The unique thing about Ronin is its singular focus on meeting the scaling demands of high-volume games. Back in 2021 the Ronin network processed 15% of all NFT trading volume which demonstrated its immense throughput capability. Ronin aims to be the go-to blockchain for Web3 games and it is optimised for fast, low-cost transactions.
The network makes use of a hybrid Proof-of-Authority and Delegated Proof-of-Stake consensus model and it enables quicker validation while at the same time maintaining a base level of decentralisation. The RON token allows users to participate as validators of transactions and the network is also secured by Sky Mavis. This is based on lessons they learned during Axie’s meteoric rise and past incidents which ensures rigorous testing and audit reviews.
Binance has since launched a $10,000 to $5,000,000 bounty for any information on potentially corrupt staff members within the company. This comes after a spate of accusations alleged its crypto token listing could be front-run due to leaks. The co-founder of Binance, Yi He, noted in a series of tweets that “heated discussions” had taken place in the community after the recent price surge.
Certain members of the community had noted that a potential leak from inside Binance was the cause in the price run, but Yi He claimed that Binance found users discovered blockchain data showing the exchange readying to receive the token.
Only two weeks ago Coinbase director Conor Grogan claimed that multiple wallets were discovered with a pattern of purchasing tokens minutes before they were listed on Binance, only to then sell them off after the announcement. Grogan speculated the wallets could belong to rogue employee(s) connected to the listings team as they would have the information on new token listings before the announcement. He also noted that it could potentially be a trader who found test trade leaks on the exchange.
Yi He announced in her tweets that the exchange is looking to overhaul its token listing process and the aforementioned bounty reward of up to %5 million will be for verified information on corrupt staff. She noted that beats the potential gains from the “rat warehouse.”
Members of the Binance team who are involved in the token listing process will be subject to stricter controls and any leaked information about upcoming listed projects would first result in a warning. After that there would be sacking for second time offenders. Binance will also permanently blacklist projects who hire staff fired from the crypto exchange for corruption and other projects should contact Binance for background checks.
Finally, Binance will also tighten up its external communications and Yi He warned that Binance will cancel token listings if listing information is leaked ahead of time. The exchange will aim to improve their technical monitoring as it is possible that scripts are monitoring Binance to automatically pounce on any news of announements.
Have a great day.
Peace. CryptoGod-1.
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