KEY POINTS
- WSJ reported that DWF Labs manipulated the prices of some tokens last year
- DWF Labs said it operates with the highest integrity, transparency, and ethics standards
- Binance said its investigation team's job was to "look at evidence without bias"
Crypto market maker DWF Labs, a prominent trading entity in the cryptocurrency industry, has denied a recent report that it engaged in market manipulation, calling the allegations "unfounded" and a distortion of facts.
The Wall Street Journal reported Thursday that cryptocurrency exchange giant Binance fired a staffer who discovered evidence of market manipulation at DWF Labs, a client of Binance. The report cited interviews with both current and former employees of the crypto titan, as well as emails, internal documents and other industry players.
The fired employee, who was part of a market surveillance team hired by Binance to detect signs of suspicious activities surrounding the exchange and its business dealings, reportedly found that DWF Labs manipulated the prices of some tokens in 2023, but Binance supposedly deemed the team did not find adequate evidence of market abuse.
The team's head was allegedly fired a week after the discovery, and team's suggestion of DWF be offloaded from Binance's client list, as per the report.
Binance has since commented on the report, saying it does "not tolerate market abuse." It also said its investigation team's job was "to be neutral and look at the evidence without bias." The statement did not mention DWF Labs, but said it will always aim to protect its users from market manipulation.
In response to WSJ, we affirm our strict market surveillance program. We do not tolerate market abuse.
— Binance (@binance) May 9, 2024
Over the last three years, we have offboarded nearly 355,000 users with a transaction volume of more than $2.5 trillion for violating our terms of use.
Market maker…
DWF Labs, on the other hand, has also released a statement on the matter, saying recent allegations in the media were "unfounded and distort the facts." The crypto firm said it "operates with the highest standards of integrity, transparency, and ethics."
To our valued partners: We want to clarify that many recent allegations reported in the press are unfounded and distort the facts.
— DWF Labs (@DWFLabs) May 9, 2024
DWF Labs operates with the highest standards of integrity, transparency, and ethics, and we remain committed to supporting you and our over 700… pic.twitter.com/aydp1hoham
The company also released a "real origin story" that highlighted its accomplishments over the years, including its partnership with the Dubai Multi-Commodities Center for a crypto startup initiative and its achievement as the top liquidity provider at crypto exchange platform Bybit in 2023.
"Establishments and fake media will not root the movement that Bitcoin started in 2009. We are in crypto for the very reasons why establishments want to get rid of us," DWF Labs.
The latest allegations regarding Binance and its business with DWF Labs came amid increasing global scrutiny of the world's largest crypto exchange by trading volume.
In Nigeria, two of the crypto behemoth's executives are faced with charges related to the company's alleged tax evasion. One executive who fled Nigerian custody was reportedly arrested last month in Kenya, while another has been held in Nigeria since late February.
In the Philippines, the local Securities and Exchange Commission blocked Binance over its alleged unregistered operations in the country.
Finally, in the United States, Binance's founder and former CEO Changpeng "CZ" Zhao was recently sentenced to four months in prison, along with millions in fines for his failure to establish anti-money laundering guardrails for the exchange's millions of users.
