Major cryptocurrency exchange Binance mistakenly stored collateral for some B tokens, representing tokenized versions of various cryptocurrencies on the $BNB chain, in the same wallet as exchange users’ funds. admitted.
According to a recently published Bloomberg report, almost half the reserves of the exchange’s 94 Binance Peg tokens are now stored in a single wallet tagged “Binance 8.” That wallet also contains the customer’s assets.
According to Bloomberg’s report, the wallet contained more tokens than were needed to reserve the B tokens in question, and that collateral for these $BNB chain tokens was held by users rather than being stored separately. indicates that it is held with the funds of
A Binance spokesperson said:
“Binance 8” is an exchange cold wallet. The collateral assets were mistakenly moved to this wallet earlier and referenced accordingly on the B-Token Proof of Collateral page. Binance is aware of this mistake and is in the process of transferring these assets to a dedicated collateral wallet.
A spokesperson reaffirmed that all Binance customer assets are “backed up 1:1 and will continue to do so.” It’s worth noting that B tokens are tokenized versions of cryptocurrencies issued on the $BNB chain, such as Bitcoin ($BTC), Ethereum ($ETH), $USDC, and $USDT.
According to Binance’s own guidelines, B tokens must be backed 1:1 by locked reserves of underlying coins, and these reserves must be kept separate from customers and exchange funds in dedicated wallets. there is.
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The Binance 8 wallet has a reserve of over 40 B tokens, including tokenized versions of major cryptocurrencies including $AAVE, Uniswap’s $UNI, MakerDAO’s $DAI and $MKR tokens.
The wallet has over $1.8 billion in assets related to B tokens, but its blockchain value is over $16.5 billion, indicating more collateral than necessary. For example, Loopring’s LRC has $92 million in LRC in its wallet, backing 622,171 wrapped LRC.
After the FTX bankruptcy in November, crypto exchange customers have asked for greater transparency about their holdings. His Bahamas-based FTX, created by Sam Bankman-Fried, has been accused of giving sister trading firm Alameda Research unrestricted access to customer assets.
The exchange case caused a lack of trust in the exchange, leading to customers withdrawing their assets. In response, the exchange has started issuing proof of reserve reports to show holdings.
As reported, Binance has announced that it destroyed over 2.06 million tokens worth over $600 million in its latest quarterly $BNB token burn.
Binance announced that a total of 2,064,494.32 BNB were burned in the transaction and a total of 7,181.03 tokens were burned from the cryptocurrency trading platform’s Pioneer Burn Program. Binance counts as burnt BNB tokens that users accidentally send and lose. Recover unrecoverable addresses and cover losses with BNB set to burn. 2,057,313.29 BNB will be burned as part of the automatic burn system.
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