Column Right

Breaking News

Binance transfers $2 billion in bitcoin as part of its reserve audit.

Binance has transferred 127,351 bitcoin ($2 billion) to demonstrate to an auditor that it controls the claimed address.

The transfer of such a large amount of bitcoin from Binance to an unknown wallet today sparked speculation in the crypto community about the nature of the transaction. Binance CEO Changpeng Zhao responded by clarifying that the transfer is part of an ongoing audit at Binance.

"This is a requirement of the Proof-of-Reserve Audit." The auditor requires us to send a specific amount to ourselves to demonstrate that we control the wallet. "The remainder is directed to a Change Address, which is a new address," Zhao claimed. He said the exchange had moved the funds to a new address under its control.

Binance officially launched its first proof-of-reserves system last week, a prototype designed to demonstrate that it has sufficient reserves to cover all customer deposits. It is currently working on a more thorough audit.

Following the collapse of FTX, the pressure on centralised crypto exchanges to implement "proof of reserves" has increased dramatically. Exchanges can demonstrate that they have sufficient reserves to meet customer withdrawal requests by publishing the total assets and liabilities. However, these initial reserves only sometimes provide a complete picture because they do not include information about the exchange's liabilities.

Reserves can be displayed in two ways or a combination of the two. According to security firm Halborn, the first is to have the funds audited by independent third-party auditors. The second is to provide a list of public addresses that hold various assets. Each has distinct advantages and disadvantages.

No comments