Binance’s CZ Cautions Investors Over Proof of Reserves by Exchanges

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  • Crypto.com’s CEO said that the mentioned transactions were, in fact, inadvertent.
  • Huobi has also issued a statement referencing the transfer to an institutional investor.

After the FTX crisis, Binance CEO CZ took the initiative to reveal the exchange’s reserves, and this has prompted other market participants to do the same. Even though exchanges have begun publishing their proof of funds. Crypto leaders are expressing concern about the huge inflows and withdrawals at certain exchanges.

According to Wu Blockchain, over $400 million worth of ether (ETH) was moved from a crypto.com cold wallet to a Gate.io address. Which amounted to around 280,000 ETH. A return of 285,000 ETH from Gate.io to the Crypto.com cold wallet was quickly reported on Twitter by the cryptocurrency community. These transactions occurred before the snapshot of proof of reserves being issued by crypto.com and Gate.io.

Unusual Substantial Transfers of Funds

In response to the claims, Crypto.com’s CEO said that the aforementioned transactions were, in fact, inadvertent. He continued by saying that it was an oversight. And that the Ethereum money had been scheduled for transfer to yet another crypto.com cold storage. The ETH tokens were inadvertently sent to a whitelisted address on Gate.io. He said that the funds had been returned to the cold storage wallets at crypto.com.

Huobi has also issued a statement referencing the transfer to an institutional investor. All reserves have been fully restored, the team reports.

In light of the persistent rumors that cryptocurrency exchanges may be manipulating their reserve funds, Binance CEO CZ has issued a caution to all crypto investors. In his presentation to the market, he warned that investors should be wary of any exchange that experiences unusually substantial transfers of funds either before or after the publication of evidence of reserves.

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