BTC Worth $2 Billion Moved by Binance Into Unknown Wallet in FTX-Downfall Aftermath

The crypto exchange stirred some controversy after it was identified to have moved BTC 127,000 in one transaction to an ‘anonymous’ wallet.

Written by Radhika Parashar, Edited by Siddharth Suvarna | Updated: 29 November 2022 16:02 IST

BTC Worth $2 Billion Moved by Binance Into Unknown Wallet in FTX-Downfall Aftermath

Photo Credit: Binance

Proof-of-reserves show that an exchange has enough assets to handle all withdrawals

Highlights

Binance has not revealed details on its auditor
Binance has joined Indian exchanges like CoinDCX with this move
Details on Binance’s proof-of-reserves not revealed as yet

Binance is currently getting its proof-of-reserves audited in the aftermath of the collapse of FTX crypto exchange, that suffered a liquidity crunch and crashed this month. The crypto exchange stirred some controversy after it was identified to have moved BTC 127,000 in one transaction to an ‘anonymous' wallet. With BTC trading at around $16,250 (roughly Rs. 13 lakh), Binance moved BTC worth over $2 billion (roughly Rs. 16,324 crore), raising tensions among members of the crypto community.

Whale Alert, a blockchain tracker sounded an alert about Binance's mammoth BTC transaction for its over two million followers on Twitter.

:rotating_light: :rotating_light: :rotating_light: :rotating_light: :rotating_light: :rotating_light: :rotating_light: :rotating_light: :rotating_light: :rotating_light: 127,351 #BTC (2,062,504,721 USD) transferred from #Binance to unknown wallethttps://t.co/zNYPuJuoRe
— Whale Alert (@whale_alert) November 28, 2022

Soon after, hysterical tweets inquiring about Binance's operational status began flooding on social media.

JUST IN: 127,351 BTC ($2 billion) have been transferred from Binance to an unknown wallet.#Bitcoin pic.twitter.com/lWxfJ6uDrs
— Akash (@Akash6073_BTC) November 28, 2022

what are you doing with all that BTC @cz_binance ?
— dingding.eth:beverage_box: (@dingdingETH) November 28, 2022

Binance dead?
— tỷyec (@duyet2ly) November 28, 2022

Changpeng Zhao, the CEO of Binance laid all suspicions to rest after he revealed that the company is getting its proof-of-reserves audited.

Proof of reserves are documents and evidence that show that a crypto exchange has sufficient assets to handle all withdrawals in cases of emergencies.

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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 :large_orange_diamond: Binance (@cz_binance) November 28, 2022

The anonymous wallet where the BTC was dropped by Binance also belongs to the exchange.

Post the unfolding of the crypto-wrecking FTX debacle, a sense of fear overtook the spirit of crypto investors. In recent weeks, over $200 billion (roughly Rs. 16,33,290 crore) have been swept out of the crypto market, leading to the shutdown of several companies and operations.

Under the circumstances, many other exchanges are also trying to regain investor trust by providing proof-of-reserve audits.

Giottus became one of the first Indian exchanges to have agreed to provide proofs of reserves.

India's CoinDCX crypto exchange also recently published its list of on-chain and off-chain balances as part of its proof-of-reserve reports.

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Further reading: Cryptocurrency, Binance, Changpeng Zhao, Proof of Reserve, Bitcoin, FTX

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More