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Binance CEO Explains 127,000 BTC Transfer and Highlights Proof of Reserve Audit

Cryptocurrency exchange Binance moves large amounts of cryptocurrency as part of its proof of reserve (PoR) audits, according to its CEO, Changpeng “CZ” Zhao.

Binance sent 127,351 Bitcoins (BTC), or more than $2 billion, to an unknown wallet on Nov. 28, Whale Alert reported November 28. According to the on-chain data, the transaction occurred at 10:00 UTC, which costs Binance a fee of just 0.000026 BTC ($0.42).

The huge Bitcoin transaction immediately triggered FUD – fear, uncertainty and doubt – within the community, with many noting that Binance moved an entire fortune of BTC in a single transaction.

CZ then took to Twitter to announce that the massive transaction was part of Binance’s PoR audit process. He also called on the community to keep calm and ignore FUD, saying:

“The verifier asks us to send us a specific amount to show that we control the wallet. And the rest goes to a change address, which is a new address. In this case, the input tx is important, as is the change.”

The CEO also reference an old tweet he posted four years ago, calling on the crypto community to “learn about blockchain transactions” and “change your address.”

“We will transfer funds between our cold wallets. A telltale sign of a new cold wallet on Binance is two small transfers to and from an existing wallet and then a large transaction. No need to be alarmed,” CZ wrote in a tweet in October 2018.

In response to growing concern over the responses, Binance’s CEO posted another tweet, saying that investors who “believe in FUD all the time” are also “probably poor.”

The latest Binance transaction apparently raised eyebrows among investors, as CZ himself earlier said it’s bad news when exchanges move large amounts of crypto to prove their wallet address. November 13, CZ tweeted:

“If an exchange has to move large amounts of crypto before or after demonstrating its wallet addresses, that is a clear sign of trouble. Stay away. Stay #SAFU.

Binance’s big deal comes shortly after former Kraken CEO and co-founder Jesse Powell claimed that Binance’s PoR Approach Was “Useless” Without Liabilities.

Related: CoinMarketCap Launches Proof of Reserve Tracker for Crypto Exchanges

A number of industry experts, including Hassan Sheikh of DAO Maker and Samson Mow, CEO of Jan3, are also convinced that the exchanges’ PoR practices are useless without liabilities because it is very difficult for fake passive exchanges.