4 months ago 2 min read

Was Binance's Proof-of-Reserves Falsified?


Within 20 hours of publishing their proof of reserves, Binance shifted 2.7 billion USDT to another wallet, according to a study from a Reddit user. According to the Reddit study, this wallet is not identifiable as a Binance wallet, is not advertised as one, and is not included in Binance's release of "Proof of Reserves." A mere 24 hours prior to this understanding, the proof of reserves article was released on November 10 at roughly 1 PM UTC.

Is Binance Playing A Trick From Their Sleeve?

Since all client assets on Binance were fully backed, Binance advised users to withdraw money from exchanges through CZ. They argued in favor of reserve proof and cautioned against putting your reliance in other exchanges. But as of yesterday, 200,000,000 tokens had been returned to a public Binance wallet, leaving roughly 2.5,000,000,000,000 Tether in the new, strange, hidden wallet, according to Reddit user analysis.

Additionally, other wallets should include additional funds in their snapshot of the proof of reserves, the expert claims. While 500 million Tron wallets are missing from the third wallet, about 2.4 billion Tron wallets are missing from Binance. According to the study, the majority of these assets seem to have disappeared on November 14.

It is questionable, nevertheless, if individuals taking money out of the second and third wallets can account for these assets. Nevertheless, there is no credible explanation for a transaction that, in the instance of the first wallet, consisted of merely shifting billions of dollars into a covert, new wallet. A lot of questions remain in light of the fact that they managed to do this within 20 hours after uploading their "proof" of reserves photo.

Why Did Binance Not Publish Information About the New Wallet?

Wherever they see appropriate, businesses are free to manage and secure their money. They are not obligated to keep it in a particular wallet. Due to a high level of inefficiency inside the company, Binance recently withdrew from the FTX acquisition. This revelation raises concerns about their own competence, though. Why did Binance not simply mention the availability of their new wallet in a short remark to their published proof of reserves statement? This demonstrates financial mismanagement, which raises suspicion, particularly in light of the issuance of the reserves warning. The lack of even a simple tweet from Binance to offer users transparency amid the unrest seen in the cryptocurrency sector lends further credence to the question.

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