- DWF Labs has denied reports from the Wall Street Journal that it engaged in $300 million of wash trading on Binance
- The Wall Street Journal has alleged that Binance discovered extensive market manipulation by DWF Labs and recommended banning several hundred users
- The market-maker has responded, stating that these allegations do not reflect its ethical business practices
Market-maker DWF Labs has denied reports that it engaged in $300 million of wash trading on Binance following accusations by the Wall Street Journal. The Journal alleged that leading exchange Binance uncovered rampant market manipulation by DWF Labs in 2023 and recommended removing several hundred users for violating the terms of use. The market-maker has hit back, however, claiming that the allegations “do not accurately represent our ethical business practices.”
$300 Million Per Month in Wash Trading?
DWF Labs became a prominent investor in crypto projects in early 2023 by participating in various funding rounds amid a generally subdued market, eventually trading more than $4 billion per month. Unlike traditional venture capital firms, DWF Labs purchased tokens worth millions at discounted rates, profiting as their prices increased.
The Wall Street Journal alleged, however, that when Binance hired a raft of top investigators to look at suspicious practices on the platform, they found evidence that DWF Labs had manipulated several token prices through $300 million in wash trades during 2023. The investigators recommended removing several hundred users for violating the terms of use, but a further investigation by Binance concluded that there was insufficient evidence of market abuse.
A week later, the head of the investigative team was dismissed.
Allegations “Unfounded” Say DWF Labs
DWF Labs yesterday rebutted the allegations, stating on Telegram that the allegations were “unfounded and…do not accurately represent our ethical business practices.” It also posted a similar rebuttal on X, where it also linked to a post on its website telling its origin story:
To our valued partners: We want to clarify that many recent allegations reported in the press are unfounded and distort the facts.
DWF Labs operates with the highest standards of integrity, transparency, and ethics, and we remain committed to supporting you and our over 700… pic.twitter.com/aydp1hoham
— DWF Labs (@DWFLabs) May 9, 2024
The origin story itself is nothing unusual, but the final line does strike a somewhat conspiracy theorist tone:
Establishments and fake media will not root the movement that Bitcoin started in 2009. We are in crypto for the very reasons why the establishments want to get rid of us.
Of course, one swallow does not make a summer, and a story in the Wall Street Journal hardly qualifies as the ‘establishment’ wanting to “get rid” of DWF Labs. If anything, this kind of rhetoric only makes the company look worse compared to a more measured and professional approach.
