Over Half of Crypto Token Listings Show Signs of Insider Trading, Reveals Solidus

In an eye-opening study, Solidus, a leading crypto market integrity platform, has uncovered signs of insider trading associated with more than half of all cryptocurrency token listings since 2021. The firm’s analysis indicates a persistent issue within the industry, yet one that can be effectively tackled with the right measures.

Solidus’ HALO platform has detected signs of insider trading on Decentralized Exchanges (DEXs) linked to 56% of all ERC-20 token listing announcements on numerous key crypto exchanges since January 2021. The platform has identified over 100 suspected insiders involved in more than 400 instances of insider trading.

Serial insider trading represents the most prevalent form of this activity, with specific entities repeatedly engaging in these transactions. Solidus’ data shows that 51 individual or linked cryptocurrency wallets have been flagged for utilizing decentralized exchanges to purchase upcoming tokens listed, often swapping Ether, Tether, or USD Coin to acquire these tokens on multiple occasions. Ten of these entities have displayed trading patterns that coincide closely with over 10 token listing announcements. Even more concerning, the three most active insiders have traded prior to over 25 listing announcements each.

Here is a summary of Solidus’ findings:

  • ERC-20 token listing announcements: 234
  • ERC-20 token listings with insider activity: 131
  • Percentage of listings with insider activity: 56%
  • Number of insider trading events: 411
  • Number of distinct insiders: 105
  • Number of distinct one-time insiders: 54
  • Number of distinct serial insiders (≥2 listings): 51
  • Number of distinct serial insiders (>10 listings): 10
  • Number of distinct serial insiders (>25 listings): 3
  • Average number of insiders per listing with insider activity: 3.14

The findings paint a concerning picture of the current state of the cryptocurrency market, pointing to the need for increased scrutiny and regulation. The revelations call for an industry-wide commitment to transparency and ethical trading practices to ensure the continued growth and trust in cryptocurrency markets.


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Users flock to Curve amid lack of stablecoin liquidity on major DEXs

In a Tweet posted by user @cryptotutor Friday, a screenshot appears to show a 27% spread between stablecoin Magic Internet Money (MIM) and USD Coin (USDC) trading pair on decentralized exchange, or DEX, Uniswap (UNI). Both have a theoretical peg of 1:1 against the U.S. Dollar.

“Magic Internet Money,” joked cryptotutor, as he attempted to swap approximately $1 million in MIM but received a quote for only 728.6k USDC. Others quickly took to social media to complain as well. In another screenshot, user @DeFiDownsin allegedly received a quote to swap $984k worth of MIM for just 4,173 in USDT on SushiSwap (SUSHI).

Curve, a popular platform for stablecoin trading, offered their insight on the matter. “Uniswap actually now works much better than what the screenshot shows. Sushiswap is just unsuitable for stablecoin-to-stablecoin swaps always,” said the Curve team via a Tweet.

During bear markets, investors typically flee from holding volatile cryptocurrencies and instead pile into stable assets that generate fixed income. For example, the amount of deposits in Terra Luna’s flagship stablecoin savings protocol, Anchor, which promises yields of up to 20%, has increased from $2.3 billion to $6.1 billion in the past 60 days.

However, the capital flight has also resulted in issues, such as stablecoin liquidity disappearing from exchanges, causing their spread to widen to excruciating levels. In addition, the flock of stablecoins into the Anchor protocol has caused its yield to become unstainable as there are not enough borrowers to pay depositors’ interest.

But despite large fluctuations in the market, Curve appears to be doing better than ever. According to its developers, the platform saw a record trading daily volume of $3.6 billion, with total deposits surpassing $16.7 billion. Investors typically seek to take advantage of the occasional difference between stablecoins’ theoretical peg to fiat money or other stablecoins to make a profit.