Menu Close

Binance Admits Mistake: Stored Customer Funds in Collateral Wallet

• Binance, a major cryptocurrency exchange, admitted to mistakenly storing customer funds in the same wallet with its collateral for some in-house tokens.
• Binance released a proof of collateral for B-Tokens, providing information for all 94 tokens issued by Binance.
• Binance stated that its corporate holdings are recorded in separate accounts and do not form part of the proof-of-reserves calculations.

Binance, one of the largest cryptocurrency exchanges, recently announced that it had made a mistake of storing customer funds in the same wallet as its collateral for some of its in-house tokens. This information was revealed when the company released its proof of collateral for B-Tokens, providing information for all 94 tokens issued by Binance.

The proof of collateral stated that Binance reserves for almost 50% of all B-Tokens are stored in a single wallet called “Binance 8.” This wallet holds significantly more tokens in reserve than what is required for the amount of B-Tokens that Binance has issued. This suggests that Binance mixed collateral with clients’ coins rather than storing such assets separately.

This type of wallet management system contradicts Binance’s own wallet guidelines. According to their proof of reserve page, the exchanges’ corporate holdings are recorded in separate accounts and do not form part of the proof-of-reserves calculations. Binance has since clarified that they are taking steps to rectify this mistake by transferring the assets in question to dedicated collateral wallets.

The news of Binance’s mistake has caused concern among users as it raises doubts about the safety of their funds. Binance has assured its customers that their funds are safe and secure, and have taken the necessary actions to rectify the issue.

Despite the mistake, Binance’s proof of collateral reinforces its commitment to transparency and accountability. This news is a reminder to all cryptocurrency users to take extra measures to ensure the security and safety of their funds.