Binance has moved 127,351 bitcoin, which is worth $2 billion.
Binance CEO Changpeng Zhao said that this was done as part of a review of the exchange’s reserves.
Binance Moves Over $2 Billion to a Wallet
Binance moved 127,351 bitcoin, which is worth $2 billion, to show an auditor that it has control over the address it said it did.
When Binance sent such a large amount of bitcoin to an unknown wallet today, people in the cryptocurrency world started to wonder what was going on. In response, Changpeng Zhao, the CEO of Binance, said that the transfer was part of an audit that is still going on at Binance.
“This is part of the Proof-of-Reserve Audit. The auditor wants us to send a certain amount to ourselves as proof that we own the wallet. And the rest goes to a Change Address, which is a new address,” Zhao said. He also said that the funds have been moved to a new address that the exchange controls.
This is part of the Proof-of-Reserve Audit. The auditor require 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. In this case, the Input tx is big, and so is the Change. Ignore FUD! https://t.co/36wUPphIZk pic.twitter.com/2NkH5L5J9j
— CZ 🔶 Binance (@cz_binance) November 28, 2022
Last week, Binance officially launched its first proof-of-reserves system, which is a prototype meant to show that it has enough reserves to cover all customer deposits. It is working on a more thorough audit right now.
After the crypto exchange FTX went down, there is a lot more pressure on centralised crypto exchanges to use “proof of reserves.” By putting out the total amount of assets and liabilities, exchanges can show that they have enough money on hand to meet customer withdrawal requests. But these initial reserves don’t always show the whole picture because they don’t give information about the exchange’s debts.
Reserves can be shown in two different ways, or both can be used together. The first way is to have independent third-party auditors check the reserves. The second way, as noted by security firm Halborn, is to make a list of public addresses that hold different assets. Each one has different pros and cons.