The cryptocurrency exchange known as Binance has responded to a report published by Forbes that asserts it secretly moved $1.8 billion in customer collateral.
As AcyptoAnnals reported earlier, the leading cryptocurrency exchange reportedly shifted the assets that backed stablecoins without telling its consumers of the move.
According to the report published by Forbes, Binance shifted a sizeable portion (1.1 billion dollars) of the customer assets transferred to Cumberland, the cryptocurrency trading arm of DRW Holdings LLC, a multifaceted trading corporation based in Chicago.
Patrick Hillman, who serves as chief strategy officer at Binance, explained that it is common practice to move money across several different wallets.
Hillman also dispelled rumors by drawing attention to the fact that the blockchain system’s wallets and ledgers are open to public inspection.
However, Hillman sidestepped the topic of an external transfer from a digital wallet, even though he discounted the danger surrounding the mixing of investors’ funds.
These moved assets have been used as collateral for Binance coins pegged to certain other digital currencies before they were transferred.
The statements posted by Hillman indicate that even though the holdings in Binance’s publically accessible exchange wallets are available to the public, the company has internal records for tracking funds.
Binance’s recent attempt to establish solvency via proof-of-reserves exercises is undermined by this scenario, though.
In addition, the management of two separate sets of books gives the impression that Binance is trying to win the faith of its customers and the regulatory bodies that oversee it, even though this makes it very difficult to assess the company’s financial health.
Notwithstanding this, a spokesman for Binance cast doubt on the truth of the Forbes collateral report, claiming (1) the following:
“The on-chain transactions identified are related to the administration of internal wallets. Even though Binance has admitted in the past that the wallet management mechanisms for Binance-pegged token collateral have not always been perfect, the collateralization of user assets was never harmed in any manner. On a more long-term basis, the procedures for handling our collateral wallets have been improved, which can be verified on the blockchain.
Other Remarkable Takeaways from the Forbes Binance Collateral Report
The report from Forbes also mentioned that during August and the beginning of December, Binance put the money of its consumers to “other hidden uses.”
In addition, the tabloid disclosed that the transferred cash was in the form of USDC stablecoin tokens.
Forbes said that FTX sibling trading business Alameda Research and cryptocurrency company Amber Group were among the other receivers of the transferred cash. Last but not least, the article asserted that Binance transferred some of the assets to Justin Sun, a cryptocurrency entrepreneur and the founder of TRON.
The research parallels the movement of funds on Binance and the asset reorganization that occurred before FTX’s catastrophic failure in November.
Portal for the Binance Airdrop
Binance released its airdrop platform late on Friday to provide a more simplified user experience for customers and keep track of all supported coins.
The Binance Airdrop Portal has established itself as a one-stop shop offering comprehensive details on all accessible hosted tokens.
The Airdrop Period, Token Status, Snapshot Time, and Mode of Operation are among the details that are currently available.
There is already a wide assortment of tokens available on the platform, some of which include the Origin Dollar Governance (OGV), Terra (LUNA), Boba Token (BOBA), and KeyFi (KEYFI).
The unveiling of Binance’s airdrop comes on the heels of the cryptocurrency exchange’s attempts to help earthquake victims in Turkey by distributing ‘airdroppable’ BNB tokens.
The CEO of Binance, Changpeng Zhao, expressed his hope that the company’s plan to airdrop $100 worth of BNB tokens to Turkey will relieve those affected.