Introduction

Recently while scrolling through Twitter, I came across some explosive news about the "unspoken rules" in our crypto world. As a crypto veteran who's been trading since 2017, I've witnessed countless dramatic price swings. Whenever I saw random coins suddenly taking off, I always wondered how much manipulation was behind it. After seeing this latest survey report from Solidus Labs, I realized the situation is far worse than I imagined.

Shocking Findings

Brothers, you won't believe this - from January 2021 until now, 56% of ERC-20 tokens listed on major exchanges show signs of insider trading! What does this mean? It means that out of every two newly listed coins you buy, one has been manipulated by people with insider information. It's outrageous when you think about it - isn't this just blatant retail exploitation?

Even more shocking, Solidus Labs discovered through their HALO platform that over 100 "pros" specializing in insider trading were active during this period, participating in over 400 trading incidents. Some are practically "insider trading professionals," appearing in more than 25 token listings. How do they manage this? Do they have relatives working at every exchange?

I remember last year when a guy bragged to me about knowing someone on a major exchange's listing team, claiming he got advance notice of every new listing. I was skeptical then, but now it seems this isn't uncommon. Apparently, some projects even offer "benefits" to exchange employees so they can accumulate positions at low prices before listing and dump at high prices later.

Trading Techniques

The methods these insider traders use are diverse, but they all boil down to profiting from information asymmetry. Their most common tactic is operating on DEXs (decentralized exchanges). Why DEXs? Because these platforms don't require identity verification, and while transactions are recorded on-chain, it's difficult to trace who's behind them.

For example, when a trader gets inside information from an exchange contact about a token listing on Binance next week, they immediately buy large quantities of that token on platforms like Uniswap using ETH or USDT. When Binance officially announces the listing, the price typically skyrockets, allowing them to sell for profits ranging from several times to dozens of times their investment.

I once witnessed an extreme case where a token surged 300% the day before its major exchange listing announcement. Everyone was puzzled, thinking it was just marketing. The next day, surprise - it was actually getting listed on a major exchange. Those with advance knowledge multiplied their investment several times overnight.

More sophisticated players use multiple wallet addresses for distributed operations, each buying small amounts to avoid attention. They then sell in batches after the price increases. Some veterans go further, using "proxies" to operate while staying completely anonymous, making detection even harder.

Regulatory Status

Regulators are starting to take action against this situation. The SEC (Securities and Exchange Commission) recently made headlines by charging a former Coinbase manager with insider trading, making a significant profit from his position. This case sets a precedent, warning potential insider traders about the consequences.

Various tools for monitoring suspicious trading have emerged in the market. These tools track price movements of mainstream coins in real-time, automatically alerting when they detect abnormal fluctuations like rapid price changes or suspicious large transactions.

However, honestly, these regulatory measures have limited effectiveness. The cryptocurrency market operates 24/7 globally, making complete regulatory control practically impossible. Additionally, some projects and exchanges are registered in regions with loose regulations, further complicating oversight.

I've heard some exchanges have internal compliance departments that conduct regular staff training, emphasizing the prohibition of leaking listing information or trading based on privileged information. However, the massive potential profits often prove too tempting for some to resist.

Personal Recommendations

As a veteran who has experienced several complete bull and bear cycles, I believe successful investing in this environment requires specific skills.

First, be extremely cautious with newly listed tokens. If you notice unusual price movements before listing, it's best to stay away. It likely indicates pre-listing manipulation followed by massive selling after listing. I once learned this lesson the hard way, buying at the peak on listing day only to see a 90% drop the next day.

Second, stick to legitimate major exchanges. While their fees might be higher, they offer better security and fairness. Some friends prefer smaller exchanges for lower fees but often encounter issues like withdrawal restrictions or sudden trading suspensions.

Third, learn to evaluate project fundamentals. Don't just focus on price trends - research team backgrounds, technical capabilities, and development plans. Truly valuable projects don't need insider trading to succeed. I now spend at least a week studying whitepapers, reviewing code commits, and monitoring community activities before investing in new projects.

Finally, practice position management. Don't invest everything - maintain a safety buffer. I recommend limiting single token positions to no more than 20% of total assets, protecting against worst-case scenarios.

Future Outlook

Honestly, seeing such data always frustrates me. After all these years, the crypto space remains chaotic. However, all emerging markets go through similar phases. Like the early stock market, it takes numerous ups and downs to become regulated.

I believe insider trading will decrease as regulations improve and markets mature. More institutional investors are entering the market, bringing more professional trading practices and mature investment philosophies. Additionally, new tools for preventing insider trading will emerge as blockchain technology advances.

However, retail investors shouldn't solely rely on regulatory protection. The key is improving our investment skills, learning to identify risks, and developing proper investment principles. This is essential for surviving in this opportunity-rich but risky market.

Looking back, I've noticed that those who truly succeeded in crypto didn't rely on insider information. They either identified quality projects early and held long-term or built positions at market bottoms through careful research and analysis. In contrast, those seeking shortcuts through insider trading often end up losing heavily.

I believe patience and value investing are crucial in crypto. Don't expect overnight riches - it's unrealistic. True wealth accumulation is gradual, requiring continuous learning, practice, and reflection.

Finally, despite current market conditions, blockchain technology's future remains bright. As technology advances and use cases expand, the industry will improve. As investors, we must maintain proper investment principles, continuously improve ourselves, and seize opportunities in this promising market.