In a revealing study, Solidus, a leading crypto market integrity platform, discovered signs of insider trading associated with more than half of all cryptocurrency token listings since 2021. The firm’s analysis indicates a persistent problem within the industry, but which can be effectively addressed with the appropriate measures.

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

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 using decentralized exchanges to purchase the next listed tokens, often trading Ether, Tether, or USD Coin to acquire these tokens multiple times. Ten of these entities have shown trading patterns that closely match more than 10 token listing announcements. Even more worrisome, the three most active pundits have traded before more than 25 listing announcements each.

Here is a summary of Solidus’ findings:

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

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