Binance, the biggest crypto exchange in the world, become one of the first crypto exchanges in the world to publish their Proof-of-Reserves reports
However, only 20 hours after publishing the report, Binance moved $2.5 billion worth of BTC out of their Proof-of-Reserves wallets
“We can confirm that the ‘undisclosed wallet’ mentioned here, ending with WkJFo, is one of Binance’s TRX cold wallets.”, Said Binance.
To assert the same, exchanges are sharing their Proof-of-Reserves within their community to bring back things to normal after the FTX crash.
Binance, the biggest crypto exchange in the world, become one of the first crypto exchanges in the world to publish their Proof-of-Reserves reports. Changpeng Zhao, the founder of Binance, shared a tweet releasing their reserves report on 10th November 2022.
However, only 20 hours after publishing the report, Binance moved $2.5 billion worth of BTC out of their Proof-of-Reserves wallets. This amount was moved to a completely unknown wallet without any official notification from the exchange.
Here are some of the snapshots from the on-chain data that confirm the transfer of assets from their Proof-of-Reserves:
None of these transfers were clarified by anyone in an official declaration even days after the assets were moved. But surprisingly, CZ made a tweet asking people not to trust those exchanges that “Move a large number of cryptocurrencies after demonstrating their wallet addresses”
This was exactly what Binance did with their Proof-of-Reserves wallets without sharing any information with their customers. Why the contradiction? Wasn’t CZ aware of the things happening in Binance?
The Binance came forward with a response once this news gained highlight over a subreddit. Responding to the thread that brought this information to everyone’s notice, Binance said,
“We can confirm that the ‘undisclosed wallet’ mentioned here, ending with WkJFo, is one of Binance’s TRX cold wallets. The asset movements you’re highlighting are the result of standard operations which move funds between our internal wallets.”
Binance made it public after 7 days of the transfer of these assets that the wallet to which these BTC were moved was one of their own. Binance continued,
“This is a starting point while we work to create a Merkle tree proof of reserves (POF) that we are developing with Vitalik and will share with the community in the next few weeks. Therefore, any discrepancies between wallets shown are due to the incomplete data set.”
It is surprising that Binance, the largest cryptocurrency exchange in the world and approximately 10 times the size of FTX, published a shady Proof-of-Reserves report and did not care to make it clear to their customers until they came to notice it themselves.
Apart from that, moving extensive amounts of user funds from one wallet to another wallet without sharing any relevant information with the users shouldn’t be the parameter that a leading exchange should set in the market.
Recently, CZ has been tutoring his followers about the things that they should do and the things they should avoid. We are sure that the ethics class from this leading crypto influencer will reflect not only in the policies and tweets of his exchange but also in the actions that they commence with user funds.
CoinGabbar is the first crypto news portal to cover this and all we want to say to the Binance customers is that #NotYourKeysNotYourCrypto. Cryptocurrencies are about developing a trustless environment and we should collectively work toward the decentralization of power.