Binance is currently having an audit of its proof-of-reserves after the FTX cryptocurrency exchange went down this month due to cash dearth and people lost their life savings.
When it emerged that the biggest crypto exchange had moved 127,000 BTC in one transaction to an anonymous wallet, it created panic among its users who thought that it was Binance’s turn after FTX.
At a time when BTC was worth about $16,250 (roughly Rs3.8m), Binance moved BTC worth more than $2 billion.
Whale Alert, a blockchain tracker, sent a tweet to its more than two million Twitter followers about Binance’s huge BTC transaction.
Soon after, social media was filled with frantic tweets asking if Binance was still working.
Changpeng Zhao, the CEO of Binance, put an end to all rumors when he said that the company is having an audit of its proof-of-reserves.
Proof of reserves are documents and other proof that a cryptocurrency exchange has enough money to handle all withdrawals in case of an emergency.
Binance dropped the BTC in an anonymous wallet that is also owned by the exchange.
After the FTX fiasco, which caused a lot of damage to crypto, people who had invested in crypto started to feel afraid. In the past few weeks, more than $200 billion have been taken out of the crypto market, causing several companies and operations to shut down.
In this situation, many other exchanges are also carrying out proof-of-reserve audits to try to win back the trust of investors.