DWF Labs denies report that it did $300 million of wash trading on Binance last year
Quick Take
- A Wall Street Journal report claims that Binance fired its top investigators after they alleged top VIP client DWF Labs did $300 million of wash trading in 2023.
- DWF Labs says the accusations are “unfounded.”
Crypto trading and market-making firm DWF Labs denied reports that it engaged in $300 million of wash trading on Binance in 2023.
"It has come to our attention that a recent article contains many allegations that we believe to be unfounded and that do not accurately represent our ethical business practices," DWF Labs said in its Telegram channel.
The Wall Street Journal alleged that when Binance hired a raft of top investigators in 2022, they found evidence of rampant market manipulation on the exchange, citing sources. At the time, these investigators recommended removing several hundred users for violating the terms of use.
In late 2023, this surveillance team claimed that DWF Labs had manipulated the price of the YGG token and at least six other tokens, the WSJ said, and processed more than $300 million of wash trades that year — recommending the client be removed.
Binance launched an investigation into the surveillance team itself and the evidence it had found, and claimed that there was insufficient evidence of such activities. A week later, the exchange fired the head of the surveillance team and then rejected the request to remove the trading firm, the WSJ said.
"Binance emphatically rejects any assertion that its market surveillance program has permitted market manipulation on our platform. We have a robust market surveillance framework that identifies and takes action against market abuse. Any users that breach our terms of use are off-boarded; we do not tolerate market abuse," a Binance spokesperson told The Block.
The article also reiterated previous reporting by The Block that DWF Labs offered clients the ability to drive up the prices of their tokens and create "artificial volume," according to documents it had provided to clients.
A Binance spokesperson said it was unaware of such documents. “If true, it would be very concerning to us and other participants,” a spokesperson told the WSJ.
Binance also told the journal that it has off-boarded nearly 355,000 users with a combined trading volume of $2.5 trillion for platform violations in the last three years.
Update: Added comment from Binance and clarified that DWF Labs made its statement in its Telegram channel.
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