The popularly known crypto exchange platform – Binance, was said to have moved billions of USDT stable coins from its Proof of Reserves to an unrevealed wallet. This took place hours after the exchange publicized its Proof of Reserves to enhance transparency for safety defence.
The proof reserve will also help put the minds of investors and users at ease that their funds are safe following the collapse of the FTX exchange, a platform accused of mishandling customers’ funds and fraud.
The exchange claimed that the security of the digital assets of its customers is guaranteed and thus urged users to withdraw their funds from other exchanges and transfer them to its ecosystem. Shortly after, 2.7 billion USDT was transferred to a wallet not reflected in the publicized Proof of Reservations.
Following the snapshot, some 200 million tokens were moved back to a Binance wallet, leaving us with a total of 2.5 billion USDT in the hidden wallet. Within that period, two other wallets holding huge funds were revealed in the snapshots with considerable reductions in funds. About 2.4 billion is nowhere to be found in the first of these two wallets, while 500 million reduces the second.
Only Binance can give a proper and convincing explanation of why it has kept these transactions from the knowledge of the public while still claiming to control a transparent exchange system. No doubt, a well-liked digital exchange platform like Binance is expected to control and secure the assets of its users in the safest way possible while at the same time maintaining straightforwardness. A tweet or a post could have gone a long way toward quieting its users’ disappointed thoughts without making Binance appear suspicious.
Ideally, the Proof of Asset provided by Binance was meant to assure the users that their assets have an equivalent value to Binance’s native token. However, Binance has failed to ensure the accurate or complete backing of some cross-chain assets or provide a Proof of Asset list for most of the assets in its ecosystem.
Many are saying Binance is manipulating the sum of its users’ cryptocurrencies by producing mock-up BNB tokens that do not represent the actual value of their assets. As a result, Binance could sell or use the original value of the tangible assets.
Who knows, that could be a security measure to ensure the safety of funds in separate hidden wallets if funds are stolen from their official wallets.
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