A quest item for the obsolete quest, Hidden Enemies. After completing the quest, the insignia would remain in your inventory. Most players probably chose to delete it, but a few - like me! - hung on to it. Still in my bank after nine years! :D
I remember being so proud of this back when I was newbie in classic WoW. =D
Sadly, I probably deleted mine a few years later due to scarcity of bag space. But it survives still on five of my alts.