Friday, June 14, 2024

Binance Admits to Storing Customer Funds in the same wallet

Recent news articles state that the prominent cryptocurrency exchange Binance has acknowledged that it keeps some customer assets in the same wallet that it uses to store its own collateral for certain of its in-house tokens.

Binance quickly started the process of shifting the assets in question to particular wallets that would serve as collateral when the information was made public and shortly after the information was made public.

Binance allegedly made a mistake when it held the collateral for some of the Binance-minted tokens, also known as B-Tokens, in a wallet that also contains customer assets, as stated in an article that was published by Bloomberg on January 24.

Binance released a proof of collateral for B-Tokens accessible to the public on Monday. This document includes information for each of the 94 tokens that the business has previously issued.

In a statement that was released not too long ago, the business emphasised the fact that B-Tokens are always fully collateralized and backed at a ratio of 1:1.

According to the proof of collateral, Binance reserves for about half of all B-Tokens are now housed in a single wallet known as “Binance 8.”

Given the entire quantity of B-Tokens that Binance has made available, the reserve token supply that is retained by the wallet is far more than what one may have anticipated it to be.

This is supposed to provide validity to the idea that Binance combined clients’ currency and collateral rather than keeping the two different sorts of assets in separate places.

Even if the problem is isolated to B-Tokens alone, it would seem that such a wallet management system would go against the standards that Binance has set for its very own wallet. This is the case despite the fact that the issue only affects B-Tokens.

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