As part of a cryptocurrency reserve audit, the exchange Binance transferred 127,351 BTC (roughly $2.06 billion). This was how CEO Changpeng Zhao commented on reports of the on-chain transaction.
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
“This is part of the Proof-of-Reserve audit. The auditor required us to send a specific amount to ourselves to prove we control the wallet […]. Ignore the FUD!”
One user noted that “many crypto commentators” used the large exchange transaction to forecast a “huge crash”.
“Their short positions may lead to losses. (Not financial advice).” Binance’s CEO quipped.
Their shorts may get rekt. (not financial advice)
— CZ 🔶 Binance (@cz_binance) November 28, 2022
Earlier in November, against the backdrop of the FTX collapse, the exchange disclosed information about its own crypto reserves.
Then Binance announced the Proof-of-Reserves feature, which will allow bitcoin holders to verify that their funds on the platform are backed by corresponding asset volumes. It is expected that the solution will be extended in the future to other cryptocurrencies.
Kraken founder Jesse Powell criticized Binance’s initiative. In his view, the feature does not prove that the exchange holds more bitcoins than it owes to customers.
The company led by Zhao used a Merkle tree to consolidate wallet data. According to Ethereum founder Vitalik Buterin, the best result would be achieved by the use of zk-SNARKs.
Earlier, following Binance, several crypto platforms, including Huobi, Bitfinex and Bybit, disclosed information about their reserves.
Follow ForkLog’s bitcoin news on our Telegram — crypto news, prices and analysis.