Binance is receiving flak from the crypto community after moving $2.7 billion out of its proof-of-reserves wallet. The exchange responded, saying the move was to a TRX cold wallet.
Update Nov 20. (12:00UTC): Global economist, Anthony Roubini, recently has also commented on the move of $2.7 billion out of the Binance “proof of reserves” fund by calling out the Binance CEO’s words as “mud”
@cz_binance talk is the cheapest and not so sweet. His word is mud
Binance in Hot Water After Moving $2.7B Out of Proof of Reserves Wallethttps://t.co/fv1RamYiSY https://t.co/NfGf3QPzBB
— Nouriel Roubini (@Nouriel) November 18, 2022
All eyes are turning to Binance as the crypto community noticed that the exchange had moved $2.7 billion out of its “proof of reserves” wallet. Another Reddit post also stated that the exchange did not hold adequate proof of reserves on the BNB chain.
Some community members claim that Binance moved 2.7 billion USDT 20 hours after it had published its report. It was noted that the destination address wasn’t mentioned in the report. 200 million USDT was later moved back, leaving 2.5 billion USDT in the undisclosed wallet.
Binance has since responded to the post, noting that the undisclosed wallet is a TRX cold wallet. The executive stated, “the asset movements [highlighted] are the result of standard operations which move funds between our internal wallets.”
Binance official also mentioned that the exchange was working with Vitalik Buterin to create a Merkle tree proof of reserves for related purposes. This will let the reserves and liabilities be verified by code.
However, that doesn’t mean the exchange has been let off easy by the crypto community. In response to the Binance response to the original post, community members pointed to an old tweet of CZ’s. In it, the CEO remarked, “If an exchange has to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems. Stay away. Stay #SAFU.”
