Binance CEO explains the billion-dollar transfers between exchange wallets

Changpeng Zhao stated that the transaction was made at the request of auditors

28.11.2022 - 14:30

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2 min

What’s new? The cryptocurrency exchange Binance moved 127 351 BTC (about $2 billion) between its wallets on November 28, raising questions and suspicions from the community. The exchange’s founder Changpeng Zhao later confirmed the transaction and said it was made as part of an audit of the exchange’s proof of reserves.

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

What else is known? Zhao wrote that the audit company requested that a specific amount be sent to another exchange address to show that Binance controlled the wallet in question. He also urged them to ignore the negative rumors that have surfaced about the transaction. According to one Twitter user, many people thought the transfer of such a large amount of bitcoins was a harbinger of the market collapse, to which Zhao replied that “their shorts may get rekt.”

Their shorts may get rekt. (not financial advice)
— CZ 🔶 Binance (@cz_binance) November 28, 2022

Earlier, Binance launched its own proof of reserves system and brought in third-party auditors to verify the results of its model. The platform will also implement ZK-SNARKs technology to improve privacy and reliability. The results of the audit will show each user’s net balance, equity, and debts when using loans and margin trading.

On November 23, the OKX crypto exchange launched its certificate of proof of reserves. The platform maintains a 1:1 reserve ratio for all user assets and provides full transparency of both reserves and funds, the company noted.

To find out which platforms confirmed their solvency after the collapse of the FTX crypto exchange, see GetBlock Magazine’s article.

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