The cryptocurrency exchange confirmed its 3-month policy to prohibit insider trading by employees and their relevant family members.
Crypto exchange Binance has been a major talking point since the downfall of FTX, both inside and outside of the crypto industry. The company and its founder, Changpeng "CZ" Zhao, have been under a microscope in an attempt to keep the behemoth in line.
On Jan. 10, a tweet surfaced regarding the cryptocurrency exchange’s employee policy to prevent insider trading. It claimed Binance employees of any ranking are not allowed to participate in personal short-term trading and must hold positions for a minimum of 90 days.
Cointelegraph reached out to Binance to confirm its policy and comment on the implications.
A spokesperson from the company replied to Cointelegraph that it has a zero-tolerance policy for using insider information for profit by both employees and relevant family members.
“Every employee is subject to a 90-day hold on any investments they make, and Binance’s leaders are mandated to report any trading activity on a quarterly basis."
The spokesperson went on to say that the company has an internal process of standing by these conditions. This includes internal protocols investigated by a security team to hold those accountable who have engaged in such behavior.
“Immediate termination is the minimal repercussion," remarked the Binance representative.
Previous coverage from 2018 on Binance’s insider trading prevention policy reported a 30-day time period prior to trading assets rather than the extended 90-day period currently enforced. The company did not comment on the change.
Responses to the tweet had some community members questioning how such a policy can be practically implemented in practice. While many others called the practice “reasonable."
Related: ‘Binance is the crypto market:’ Arcane crowns the exchange 2022’s winner
The crypto world revolving around Binance does not stop. Federal prosecutors in the United States are conducting a probe of the cryptocurrency exchange in relation to money laundering charges.
Additionally, on Jan. 4, regulators in the U.S. filed a “limited objection” to Binance.US's proposed billion-dollar acquisition of Voyager Digital.
Meanwhile, Binance joined as one of the first crypto firms in the Association of Certified Sanctions Specialists to address standards of compliance with global sanctions.
