The CEO of cryptocurrency exchange Binance has stated that significant sums of cryptocurrency are being moved as part of its proof-of-reserve (PoR) audits.
On November 28, according to a tip from Whale Alert, Binance transmitted 127,351 Bitcoin, or more than $2 billion, to an unidentified wallet. On-chain data shows that the transaction took place at 10:00 AM UTC and cost Binance just 0.000026 BTC ($0.42) in fees.
Many people in the community have noted that Binance shifted a quantity that is equivalent to an entire fortune in a single transaction, which has quickly caused some FUD.
Later, Binance CEO Changpeng Zhao said on Twitter that the significant transaction is a part of Binance’s PoR audit procedure. Additionally, he urged the populace to remain composed and dismiss the FUD, saying:
“The auditor requires 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.”
The CEO also cited a tweet from four years ago in which he urged the cryptocurrency community to “learn about blockchain transactions” and “alter addresses.”
“We will be moving some funds between our cold wallets. A telltale sign of a new cold wallet on Binance is two small transfers from and back an existing wallet, then a large transaction. No need to be alarmed,” Zhao wrote in a tweet in October 2018.
The CEO of Binance tweeted once more in response to the mounting FUD in his remarks, saying that investors who “always accept FUD” are also “likely to be impoverished.”
Investors’ eyes have obviously been drawn to the most recent Binance transaction because Zhao himself stated that it is not good news when exchanges move significant sums of cryptocurrency to demonstrate their wallet address. Zhao posted the following on Twitter on November 13:
“If an exchange have to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems. Stay away. Stay #SAFU.”
The announcement comes shortly after Jesse Powell, a co-founder of Kraken and a former CEO, said Binance’s PoR strategy was “pointless” without liabilities.
It’s also widely believed by industry professionals, such as DAO Maker Hassan Sheikh and JAN3 CEO Samson Mow, that exchanges’ PoR practice is ineffective without liabilities because it’s highly challenging for exchanges to create liabilities.
