Cryptocurrency insider trading is a clear problem, but one with a solution. Solidus’ crypto market integrity platform HALO has detected evidence of insider trading via DEXs (decentralized exchanges) in connection with 56% of all ERC-20 token listing announcements on a number of major crypto exchanges since January 2021. Altogether, HALO has flagged more than 100 suspected insiders that have engaged in over 400 insider trading events.
Serial insider trading makes up the majority of this suspicious activity. Solidus has flagged 51 entities – individual cryptocurrency wallets, or groups of connected wallets – that have used decentralized exchanges to swap Ether, Tether, or USD Coin to buy soon-to-be-listed crypto tokens on two or more occasions, only to sell off those tokens shortly after. Ten of these entities have traded just before and after more than 10 token listing announcements each; the three most prolific insiders have traded ahead of and after more than 25 listing announcements apiece.
The table below summarizes Solidus’ analysis of the insider trading events surrounding these exchanges’ ERC-20 token listing announcements.