Accumulation of $LQTY, pre-Binance Listing Announcement

$LQTY was listed on Binance just a few hours ago, causing its price to double in value. Once again, there are suspicions that some individuals may have had access to this information beforehand, giving them an unfair advantage.

Coinbase is the most liquid CEX market that LQTY trades on. When examining the distribution of order sizes on Coinbase, there was an unusual increase in trading activity one hour prior to the Binance listing, which is indicative of potential insider trading behavior.

Looking more closely at on-chain activity, we discovered four wallets that exhibited suspicious behavior leading up to the announcement. This additional evidence supports our initial concerns about insider trading.

First, we noticed two freshly funded wallets that accumulated $LQTY in the past few days and later sold at a profit after the Binance announcement.

The address 0x27C2309BEd7F0f2cb8dF1C52c0c2A6bAA26182B9 funded with stablecoins from CEX spent $248k accumulating $LQTY at an average cost of $1.07, making away with about $167k in profit, averaging out after the announcement.

Next, 0xc4f4f78DA6Ee2beA38aE5b97CedA985520A77ac5 was funded with $250k USDC from OKX and began purchasing $LQTY over the last two days, buying a total of $115k USDC worth of $LQTY at an average cost of $1.33.

Upon the announcement, 0xc4f4f sold all of its LQTY holdings for a total profit of $35k It then returned all of its USDC back to OKX through intermediary wallets, which is a heuristic of insider trading behavior.

Another freshly funded wallet, 0xc4f4f78DA6Ee2beA38aE5b97CedA985520A77ac5, started buying $LQTY two days ago and immediately sold after the announcement for a $14k profit.

The wallet 0x74a698FA49f5fCB2fB7F56338d05958a7BCe4d65 bought $41k two days ago and shortly after the announcement deposited on Binance, likely to take advantage of the better liquidity there to sell.

Although it is impossible to confirm whether insider trading occurred, the on-chain activity of these addresses, combined with the unusual trading activity on Coinbase suggests that this is highly probable. Our conclusion is that multiple individuals may have had access to confidential information — whether through an insider or an API leak before the public announcement and took advantage of it.