How to find insiders on Binance

How to Spot Insiders on Binance

The goal of this article is to investigate whether there are signs of frontrunning related to Binance's token listings and to collect data on suspicious addresses and their activities. During the analysis, we identified cases where traders might have had access to confidential information, possibly due to an API or exchange leak. Although proving frontrunning is challenging, an analysis of historical transactions can help identify such cases.

Frontrunning refers to the practice where traders use insider information to execute trades before official announcements. In the case of cryptocurrencies, this can happen before the listing of new tokens on exchanges, giving an opportunity to profit from price swings.

Methodology

To identify frontrunners linked to Binance listings, we used data from three time frames:

• Accumulation of tokens during the week before Binance’s listing announcement.
• Accumulation of tokens on the day of Binance’s listing announcement.
• Accumulation of tokens 2 hours before Binance’s listing announcement.

We filtered transactions from these three time frames to include only those wallets that sold their accumulated tokens on the day of the Binance listing announcement. This approach focuses on traders who aimed to benefit from the price surge following the listing and reduce their downside risk as the price often dips afterward. If a wallet didn’t sell shortly after the announcement, it likely indicated a long-term holding strategy, not involvement in the event being analyzed.

We used several time frames because different frontrunners might have different levels of access to insider information. For example, some might only know that a token will be listed soon, without knowing the exact date and time, while others might have more specific information. The first time frame (one week before the announcement) covers the broader group, while the second and third focus on those with more precise knowledge.

Additional filters:

• Total inflow and outflow (USD) > $10k.
• Wallets must sell most of the tokens accumulated in the relevant time frame after the Binance listing announcement.

Although this method is not perfect, it allowed us to sift through tens of thousands of transactions, as frontrunners are expected to trade in larger volumes due to the valuable information they possess.

Example:

LDO
A wallet accumulated over $133k worth of LDO starting on May 3. The last buy transaction was made 3 hours before Binance’s listing announcement. The wallet sold its tokens within 1 hour after the announcement, resulting in an estimated profit of $15.7k.

As seen in the transaction history, the wallet actively swapped LDO for ETH via platforms like SushiSwap and 1inch. For example, on May 9, the wallet swapped 28,000 LDO for 38.72 ETH and 20,422.80 LDO for 28.09 ETH shortly after the announcement, suggesting an attempt to capitalize on the price surge following Binance's listing announcement.

Wallet Address – link to analysis

Suspicious Activities

We were specifically looking for several behaviors that might indicate frontrunning:

• Wallets with only a few transactions involving the token, with trading activity happening only days before or after the Binance announcement. The wallet was inactive before these events.
• Layering of funds: tokens transferred through multiple accounts before being sold or moved to a CEX address.
• The wallet was drained soon after selling the listed token, especially if it occurred shortly after Binance's announcement.
• DEX contracts for listed tokens were approved long before the Binance announcement, but the tokens were only sold after the announcement. Typically, contracts are approved in preparation for immediate trading, and pre-approval hours or days before suggests possible frontrunning.
• Wallet accumulates tokens in small batches to avoid slippage and detection.
• A fresh wallet was created just days before the Binance announcement and only trades that specific token..

Wallets with Significant Positive Balance

Wallets with significant positive balances are likely to continue being used in the future by their owners. This presents an opportunity to monitor their activity and possibly identify similar opportunities.

The estimated profits we calculated are likely significantly lower than the actual values, as we mainly used daily price snapshots. This method does not account for intraday price volatility, which could affect the accuracy of the profits earned by the analyzed addresses. The wallet list provided above is not exhaustive, as the filtering was based on various factors mentioned earlier.

All the wallets listed above have been included in our broader analysis to monitor suspicious trading activities and potential frontrunning. These wallets show varying levels of profitability and activity, as seen in their transaction history and earnings. For example, wallet 0x430 with a balance of $7,337 showed a positive profit of $19,485 (+31.91%).

For a more detailed analysis and the ability to track their actions in the future, you can click the link to view each wallet's activity:  Link