Front running

Front running in crypto refers to the unethical practice of a broker or trader executing orders on a security (such as cryptocurrencies) for their own benefit based on advance knowledge of pending orders from their clients. This can occur when a trader has access to information about large buy or sell orders and executes their own trades ahead of those orders to profit from the subsequent price movement.

Example:

Case: Trader A works for a crypto exchange and notices a large buy order for Bitcoin from one of the exchange's clients. Instead of executing the client's order immediately, Trader A buys Bitcoin for their own account, causing the price to rise. Afterward, Trader A executes the client's order at the higher price, profiting from the price increase.

In this case, Trader A front runs the client's order by exploiting their knowledge of it to profit personally. This practice is unethical and can lead to unfair advantages in the market, as well as potential legal consequences for those involved.