Binance, the world’s biggest cryptocurrency exchange by trading volume,
admitted to storing by “mistake” customers’ funds and the collateral of some of
the tokens it issues.
According to Bloomberg, Binance issues 94 Binance-peg tokens, also
called ‘B-Tokens’. However, almost half of the reserves of these tokens are kept together with
customers’ funds in a cold wallet called ‘Binance 8,’ the outlet said. The wallet’s tokens reserve
currently outnumber the volume of B-Tokens the leading crypto exchange has
issued, Bloomberg also said in a report.
Furthermore, the outlet said its calculation shows that over $539 million in
B-Tokens have been affected as a result of the mixing. However, a spokesperson who spoke to the news platform assured that users funds are backed 1:1 and added that
the exchange is taking steps to rectify the situation.
Watch the recent FMLS22 on reimagining the crypto structure.
The new development at Binance comes as centralized exchanges face greater scrutiny
following the November collapse of Bahamas-based cryptocurrency exchange , FTX,
which allegedly released customers’ funds to sister trading firm, Alameda Research.
FTX is still undergoing bankruptcy proceedings in the United States.
Over a month ago, global financial auditor Mazars in a report noted that
Binance’s reserves for Bitcoin was over-collaterized, standing at 101%, as
against…
