Binance, the world’s largest cryptocurrency exchange by trading volume, made a “proof of reserve” move after the FTX collapse. Thus, it tried to take a step in terms of users’ trust and transparency. He has also called on other exchanges in the cryptocurrency space to offer proof of reserve. However, Binance’s recent transactions may have dampened some people’s confidence in the exchange. Here are the details…
Binance trades $2.7 billion
cryptocoin.com As we have also reported, after the FTX collapse, various platforms promised to provide proof of reserve in order to transparently present their reserves to users. Chief among these was Binance. Now, the exchange has transferred $2.7 billion USDT from one of its wallets. As it is known, USDT is a stablecoin pegged to the US dollar.
The situation in question drew the reaction of users on various social media platforms. Binance said that this amount was mined before revealing the proof of reserve. The fact that the address to which the fund was sent was anonymous also drew reaction. Although the exchange sent $200 million of the $2.7 billion back to the wallet, $2.5 billion is still in the address it was sent to.
Reply from the stock exchange official
Below the post on Reddit for this topic, an answer came from an official at Binance. The official said that the transfer in question resulted from transactions between the exchange’s own wallets. He pointed out that the wallet is a cold wallet address. Users believe that the wallets shared in the proof of reserve do not represent all the addresses Binance holds.
Meanwhile, the $2.7 billion USDT transaction wasn’t the only major transaction. First, 127,000 Bitcoins (BTC) were transferred to Binance’s cold wallets. The said value is equivalent to approximately 2 billion dollars. After this transaction, 82,000 Bitcoins were sent to the wallet where the BTC reserves are kept.
The amount of Bitcoin on the stock market has increased
Meanwhile, ten on-chain shows that Bitcoin reserves on Binance have increased sharply over the past few days. For some, this could be a sign of a dump. As an analyst in a CryptoQuant post noted, funding rates have been negative at the time of these entries. “Exchange reserve” is an indicator that measures the total amount of Bitcoin currently stored in the wallets of a centralized exchange. When the value of this metric rises, investors are currently investing their crypto in the stock market.
Such a trend could have downside effects on the price of crypto, as traders can deposit money on such a platform for the purpose of selling. On the other hand, the depreciation of the reserve indicates that the coins are currently exiting the stock market. Such a trend, if sustained, could be a sign of accumulation and therefore bullish for BTC value.
