The advanced blockchain tracker and analytics system Whale Alert earlier today posted on its Twitter page that 127,351 BTC, or about 2,062,504,721, had been transferred from Binance to an unidentified wallet. This claim set off alarm bells across Twitter.
On-chain data shows that the transaction took place at 10:00 AM UTC and cost Binance just 0.000026 BTC ($0.42) in fees.
At this news, the crypto community on Twitter jumped up and down and flooded the comment sections with suspicious queries. And many more people point out that Binance shifted a huge amount of BTC in a single transaction.
However, 1 hour and 34 minutes after this tweet, Changpeng “CZ” Zhao, the CEO of Binance, posted an explanation on Twitter. He reported the 127K BTC transfer, which indicates an audit of the proof-of-reserve. Tweeted CZ:
Binance Auditing Creates Controversy
Since CZ, CEO of Binance, already warned that it's bad news when exchanges move significant sums of cryptocurrency to prove their wallet address, the FUD that is circulating in this situation as the crypto winter deepens is not hysteria. People are understandably concerned about this new action by the well-known cryptocurrency trading company. CZ continues by stating that during an audit:
“The auditor requires us to send a specific amount to ourselves to show we control the wallet. And the rest goes to a change address, which is a new address. The input tx is big in this case, and so is the change.”
To demonstrate that this was not a careless activity, in a previous tweet from four years ago, CZ urged the cryptocurrency community to become familiar with blockchain transactions and change addresses. Additionally, CZ tweeted in October 2018:
CZ Takes His Time Removing FUD
Changpeng "CZ" Zhao, CEO of Binance, took some time after his post to respond to as many inquiries as he could. People have questioned why text statements signed with the inspected wallet cannot be used as the proof of assets. CZ responded that not all infrastructure allows signing.
Some people requested the auditor's confirmation on such transfers. The majority of editors, according to CZ, do not use social media, so it is difficult to achieve this.
Despite the fact that some people still had their doubts in light of the present crypto environment, the majority of people had their FUD allayed and trusted CZ's word.