The Wall Street Journal reported exclusively on May 9 that Binance, the largest cryptocurrency exchange globally, terminated its head of market surveillance following his alert about potential market manipulation by a prominent client.

Former Binance employees, as per the Journal, revealed that the surveillance team flagged suspicious trading activities by DWF Labs, a company led by a crypto trader known for his penchant for Lamborghinis, which had quickly risen as one of Binance's top clients. The team's inquiry found that DWF had been involved in pump-and-dump schemes and wash trading on Binance, violating the exchange's terms.

However, when the surveillance team presented a report recommending DWF's removal from the platform, Binance management reportedly disregarded the findings and dismissed the team's head. Subsequently, several other investigators were either laid off or left voluntarily.

In response to the Journal's report, Binance issued a statement asserting its rigorous market surveillance program and intolerance towards market abuse. The exchange stated that it had offboarded nearly 355,000 users over the last three years for violating its terms, with a total transaction volume exceeding $2.5 trillion.

Binance emphasized that its investigation team remains neutral and impartial, aiming to assess evidence without any bias, including any claims from market-making firms against their competitors. The company reiterated its commitment to fostering healthy competition and safeguarding users from manipulation.

DWF Labs refuted the allegations as "unfounded" and distorted. The firm maintained that it operates with the highest ethical standards and remains dedicated to supporting its extensive network of partners in the cryptocurrency ecosystem.

These allegations emerge amid heightened regulatory scrutiny on Binance. In 2023, the exchange admitted guilt to breaching US anti-money laundering regulations and agreed to a $4.3 billion fine. Founder Changpeng Zhao stepped down as CEO and received a four-month jail sentence.

Additionally, the Securities and Exchange Commission filed civil charges accusing Binance of misleading US investors regarding its risk controls and trading practices. Earlier investigations by the Journal linked Zhao to two trading firms operating on Binance's US platform, raising concerns about their independence and compliance oversight.

The dismissal of the whistleblower and his team raises doubts about Binance's commitment to preventing market abuse and maintaining integrity on its platform. Despite the exchange's assurances of impartiality and prioritizing platform security, the Journal's findings suggest that, at times, Binance may prioritize the interests of profitable clients over concerns raised by its own investigators regarding market integrity.