Binance Stored Users' Fund with B-Tokens Collateral by ‘Mistake’: Report

Finance Magnates

Cryptocoins News / Finance Magnates 14 Views

<p>Binance, the world’s biggest cryptocurrency exchange by trading volume, admitted to storing customers’ funds and the collateral of some of the tokens it issues by "mistake." </p><p>According to Bloomberg, Binance issued 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. Currently, the wallet’s tokens' reserve outnumbers the volume of B-Tokens the leading crypto exchange has issued, Bloomberg added. </p><p>Furthermore, the outlet said its calculation shows that over $539 million in B-Tokens have been affected as a result of this action. However, a spokesperson who spoke to the news platform assured the public that users' funds are backed 1:1 and added that the exchange is taking steps to rectify the situation.</p><p>Watch the recent FMLS22 on reimagining the crypto structure.</p><p>CEXs Battle User Confidence Post FTX</p><p>The new development at Binance comes as centralized exchanges (CEXs) face greater scrutiny following the collapse in November of Bahamas-based <a href="https://www.financemagnates.com/terms/c/cryptocurrency-exchange/" class="terms__secondary-term" id="601e2e5f-0c28-4253-9ad4-5e6b251ba2fa" target="_blank">cryptocurrency exchange</a>, FTX, which allegedly released customers' funds to its sister trading firm, Alameda Research. FTX is still undergoing bankruptcy proceedings in the United States.</p><p>Over a month ago, the global financial auditor Mazars in a report noted that Binance's reserves for Bitcoin was over-collaterized, standing at 101%, as against the regular 100% or 1:1 asset-to-reserve ratio. Binance first <a href="https://www.financemagnates.com/cryptocurrency/binance-launches-proof-of-reserves-for-btc/" target="_blank" rel="follow">launched</a> its proof-of-reserves (PoR) for BTC in November last year.</p><p>Away from Binance, in a bid to assure their users of their financial health, other cryptocurrency exchanges have announced PoRs for their digital asset holdings. Last week, Seychelles-based crypto exchange OKX released its PoR which shows that the platform is <a href="https://www.financemagnates.com/cryptocurrency/okx-releases-proof-of-reserves-shows-75-billion-in-btc-eth-and-usdt/" target="_blank" rel="follow">also over-collaterized</a>, with about $7.5 billion in digital asset holdings.</p><p>Finance Magnates reports that while OKX’s users hold a total of 117,682 BTC, 1,178,993 ETH and 2,955,696,824 USDT, the crypto exchange’s reserve ratio stood at 105% for the first two digital assets and 101% for the <a href="https://www.financemagnates.com/terms/s/stablecoin/" class="terms__main-term" id="e84b040e-4d12-499b-99bf-8ba75ea058ca" target="_blank">stablecoin</a>. </p><p>Meanwhile, Singapore-based <a href="https://www.financemagnates.com/cryptocurrency/cryptocom-releases-audited-proof-of-reserves/" target="_blank" rel="follow">Crypto.com</a> and another crypto exchange <a href="https://www.financemagnates.com/cryptocurrency/bitget-shares-proof-of-reserves-launches-merkle-validator/" target="_blank" rel="follow">Biget</a> recently launched their PoRs. The asset-reserve ratios of the major cryptocurrencies on Crypto.com include BTC (102%), ETH (101%), USDC (102%), USDT (106%), USDT (106%) and XRP (101%). Others are Dogecoin (101%), Shiba Inu (102%), Link (101%) and Mana (102%).</p> This article was written by Solomon Oladipupo at www.financemagnates.com.
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