Suspected Cheating on Binance Sends Meme Coin Wild, Trader Wins Big

An alleged fraud attempt on BROCCOLI(714) triggered massive volatility that a savvy trader capitalized on.

Unusual trading activity in the low-liquidity meme coin BROCCOLI(714) on Binance was marked on January 1 after the commodity experienced a sudden price increase followed by a sharp pullback.

The volatility allowed the anonymous trader “Vida” to make an estimated $1 million profit by reacting quickly to unusual market signals.

Confusion on BROCCOLI(714)

Vida said he already holds positions and derivatives in BROCCOLI(714) and has set up automatic alerts to flag sudden price increases and large differences between the futures and forward price. When those warnings were triggered, he saw a huge imbalance in Binance’s order book. These include unusually large buy orders in the spot market that have not been matched at similar depth in the futures market.

Viewing the behavior as highly unusual, Vida first closed an existing funding rate arbitrage position to protect gains, then added long exposure as prices continued to rise. He then monitors the order book for signs that large bids will be issued, which he believes will indicate an imminent reversal. When those bids disappeared, Vida exited his long positions and immediately shorted, then closed out those trades after prices fell sharply.

As reported by blockchain analytics company Lookonchain, this activity appeared to be related to a hacker gaining control of market maker accounts on Binance. According to Lookonchain, the suspected attacker tried to move money by buying real estate, opening permanent positions through other accounts, and using syndicated trading. The main reason to choose BROCCOLI(714) would be because of its deep liquidity and ease of price manipulation.

However, in a subsequent update, Vida said that Binance’s internal investigation found no clear evidence of a hacking incident. The exchange stated that it did not see any direct signs of account corruption based on internal data.

Community Response

Many traders have called price action fake and engineered. Several users said the token traded flat for most of the day before jumping and crashing, with no real need for space or on-chain activity to support the move. Some have argued that the rally was driven almost by the future and points to a forced squeeze rather than organic buying.

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The latest incident also raised concerns about the concentration of supply, as wallets controlled by Binance have a large share of the tokens, making price availability more centralized.