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Binance and DWF Labs in $300 Million Wash Trade Claims, Yi He Blames “Mainstream Media”, Canada Fines Exchange

Published May 10, 2024 4:58 PM
Eddie Mitchell
Published May 10, 2024 4:58 PM
Key Takeaways
  • Binance’s market maker partner DWF Labs is accused of handling hundreds of millions in wash trades.
  • DWF Labs and Binance refute the allegations, maintaining their commitment to tackling market manipulation.
  • Canada has fined Binance $4.38 for AML violations and failure to report significant crypto transactions.

Binance’s market maker partner, DWF Labs, has found itself in hot water after a Wall Street Journal (WSJ) report alleged that the firm had conducted some $300 million in wash trades throughout 2023.

Binance, who is accused of firing the investigator who discovered DWF Labs’ activities, has also received a fine from Canadian authorities for anti-money laundering (AML) violations.

Numerous Allegations

The WSJ reported that Binance fired one of its own investigators after they uncovered evidence of DWF Labs’ alleged market manipulation.

According to the report, Binance‘s market-surveillance team found that DWF had conducted pump-and-dump schemes, and manipulated the price of several cryptocurrencies, totaling $300 million in wash trades throughout 2023.

Binance co-founder, Yi He, and DWF Labs have both denied the allegations from the WSJ. Notably, He criticized the media being reactionary and driven by emotional biases.

Binance also came forth to issue a response on social media, reaffirming their commitment to fighting market manipulation and “ensure healthy competition in the industry,”.

DWF Labs co-founder Andrei Grachev has also come out to defend his firm . He writes that people are talking, and that if “your competitors fight you desperately”, then it is a sign that things are going “the right way.”

Canada Fines Binance

Adding to Binance’s mounting woes, the Financial Transactions and Reports Analysis Centre (FINTRAC) of Canada has fined the exchange $4.38 million for money laundering violations.

As per local reports , Canada’s regulatory body reported that Binance failed to comply with vital and necessary requirements, which included failing to register (multiple times) with FINTRAC as a foreign money services business.

Binance, which had closed its Canadian operations in 2023, had also neglected obligations to report receiving C$10,000 on a staggering 5,902 occasions between June 2021 and July 2023.

Bad Times for Binance

After the fall of former CEO, Changpeng “CZ” Zhao in 2023 when he and Binance were found guilty of several financial crimes, resulting in a $4.3 billion penalty for the exchange, plus a criminal fine and jail sentence for CZ,

Despite receiving a $4.3 billion fine for financial crimes in the U.S. last year, which has also seen former CEO Changpeng “CZ” Zhao jailed for four months, Binance continues to find itself in the crosshairs of regulators and governments worldwide.

With ongoing troubles in Nigeria, high-profile lawsuits involving football legend Cristiano Ronaldo, and a revived court case in the U.S. – to name a few – faith in Binance as a leading crypto exchange could begin to dwindle in throughout 2024.

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