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Binance Token Listings: A Look at Possible Frontrunning Activities
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Key Takeaways
17 min read
  • The study looked for suspicious activity, such as wallets with few transactions involving the listed token, layering of funds, or DEX contracts approved shortly before the Binance announcement.
  • The analysis identified wallets with trading activities resembling frontrunning and separated them into two categories: funded and active wallets with significant wallet balances and drained wallets with insignificant balances.
  • Despite efforts to prevent such activities, we still continue to observe trading activity that closely resembles that of front runners and insider trading leading even in recent listings e.g. (SYN, GNS, and LQTY).
  • Key considerations include: Inconsistent insider information, difficulty in tracking tokens transferred to CEX addresses and distinguishing between wash-trading activities vs front running activities.

Introduction

The purpose of this report is twofold: first, to investigate whether there is any indication of Binance engaging in front-running activities related to token listings; and second, to compile a list of suspected addresses and their related activities.

Based on the timely accuracy of many of these trades, it seems likely that these entities may have had access to privileged information about the listings. This could potentially be due to the discovery of an API or exchange leak by traders or on-chain detectives. However, proving front-running activities can be challenging, and while trading records can be helpful, other evidence may also be necessary to build a strong case.

In our analysis, we examined historical...