Please watch from 10:15 in this YouTube video:
I was watching through Binance's CEO CZ's video on how Binance itself is regulating new ICOs by holding ICO funds(around 70%) and slowly flooding the market as the company behind ICO reaches milestones. (Watch from 10:15 in above video to understand current ICO Deals on Binance) Now, this seems like a great idea for protecting traders and investors from ICO scams but there is one BIG FLAW. That is, Binance is acting as a police/central bank for ICOs and the ICO team at Binance is the central team that controls the majority supply of these ICOs.
Since Binance itself is just an exchange and they are not an approved platform by the government or any 3rd-party entity, this can easily end up with insider trading within Binance. In other words, too much power has been given to Binance with too much supply of new coins. Also, when a new milestone has been reached, insiders will buy or sell the coins few hours before and pump up or dump down the price while Binance dumps new coins on their exchange. At this point, you will simply have to "trust" the ICO team at Binance and hope that no one leaks information before the coins are released.
The main problem here is that humans are greedy and when an insider trading is possible, people WILL take advantage. The solution to this problem is to make sure there is a 3rd-party auditing company who watches these coin releases from Binance and make sure there is no insider trading going on or simply do not let Binance control the supply of these ICO coins. Also, Binance is charging ridiculous amounts of money (near $1 million USD) for ICOs to get on their platform. Basically, this is a totalitarian nazi-like method that benefits Binance more than the traders or ICO companies.
(You can see many OG crypto traders are staying away from Binance for this very reason, a flawed ICO system.)
Now, cryptocurrency is NOT regulated, insider trading is 100% legal at this point. And we already have multitude of evidence that insider trading is going on and I have been a witness to it. Couple weeks back, when Steem got on Binance, we saw a very big pump 3 hours before the announcement and Steem getting on Binance, which clearly demonstrates insider trading. While Steem isn't an ICO, that event clearly proves insider trading has been going on at Binance. While Binance employees might not directly do insider trading but they can easily tell their family or friends about it. THAT is the problem, the way it is setup up at Binance, insider trading is going on while all of us traders have no idea.
There are also 2 reddit posts about insider trading from Binance which I posted them on Twitter yesterday but Binance reddit has moved since the last 12 hours! Binance is certainly trying to hide all evidence.
(Someone at Binance does not want truth to be told, Binance has moved Binance reddit to a new one to erase evidence as of this morning.)
So what?
Binance's rise in the last 6 months have been exponential, they did this through a lot of affiliate pyramid marketing(referrals) and by holding a lot of new ICO coins(70%) in their exchange. While CZ's idea is a great idea for preventing fraud ICOs, it is also inviting new insider trading from Binance's own employees.
Why did I write this?
I have been very fond of Binance and started trading on the platform about a month back. In the recent problems with the exchange shutting down for around 48 hours due to too many users and DoS attacks, I have been worried about Binance being hacked. While I don't think it was hacked or it was a big enough hack to affect anything, I have stumbled onto CZ's video and realized how flawed their ICO deals are. Also, CZ the CEO Binance went out of his way to block me on Twitter(while I have not tweeted him nor checked out his Twitter before that), which seems strange as if I were him, I would reach out to my customers and try to communicate things thru.
Okay, the truth is that insider trading is going on many exchanges anyways but my point is that you should all be aware of things that may be going on in the background with these exchanges. Knowledge is power and hopefully this enlighten you on what could possibly go wrong when an exchange has too much power.
Best, Max
More evidence:
Also see:
https://www.reddit.com/r/binance/comments/7sbr97/evidence_of_insider_trading_on_pivx_listing/
https://bitcointalk.org/index.php?topic=2813504.0;prev_next=prev
P.S. Try doing your own research, do a search on Twitter for "Binance Insider" and you will find many more suspicious events.