Binance CEO explains 127K BTC transfer, points at proof-of-reserve audit

Published at: Nov. 28, 2022

Cryptocurrency exchange Binance is moving large amounts of cryptocurrency as part of its proof-of-reserve (PoR) audits, according to the CEO.

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

The huge Bitcoin transaction has immediately triggered some FUD in the community, with many noting that Binance has moved an amount that is an entire fortune in one single transaction.

Binance CEO Changpeng Zhao subsequently took to Twitter to announce that the massive transaction is part of Binance’s PoR audit process. He also called the community to keep calm and ignore the FUD, stating:

“The auditor requires us to send a specific amount to ourselves to show we control the wallet. And the rest goes to a change address, which is a new address. In this case, the input tx is big, and so is the change."

The CEO also referred to an old post on Twitter that he posted four years ago, calling on the crypto community to “learn about blockchain transactions” and “change addresses.”

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

In response to growing FUD in his comments, Binance CEO posted another tweet, arguing that investors that “believe FUD all the time,” are also “likely to be poor.”

I know it's hard. If you thought a fraudster is legit, you probably are already poor.But...If you believe FUD all the time, you will also likely to be poor.Life is not easy.

— CZ Binance (@cz_binance) November 28, 2022

The latest Binance transaction has apparently raised eyebrows of investors as Zhao himself declared that exchanges moving large amounts of crypto to prove their wallet address is not good news. On Nov. 13, Zhao wrote on Twitter the following statement:

“If an exchange have to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems. Stay away. Stay #SAFU.”

The news comes shortly after former Kraken CEO and co-founder Jesse Powell argued Binance’s PoR approach was “pointless” without liabilities.

A number of industry experts, including DAO Maker Hassan Sheikh and JAN3 CEO Samson Mow, are also confident that exchanges’ PoR practice is useless without liabilities because it’s very difficult for exchanges to fake liabilities.