Crypto Exchanges Share Proof Of Reserve To Combat Mistrust

Crypto exchanges chose to share proof of reserve with the public as a way to demonstrate legitimacy in order to combat the growing mistrust among cryptocurrency investors in the wake of the FTX crash. Nevertheless, several irregularities identified during on-chain investigations point to fraud and market manipulation.

Investigators discovered that 320,000 ETH were stored cold by just two days after making their information public.

On October 21, 2022, was transmitted to CEO of Kris Marszalek, however, disregarded any misconduct by claiming that the money was transferred inadvertently and later restored to the original location, dispelling any suspicion of impropriety. published its proof of reserves snapshot on October 28. Solidity developer Shegen said that funds were used for this, and he posed the following questions:

This was topping up for the proof. Gate and are fucked?

The cryptocurrency community also believes Huobi is attempting a similar manipulation. Following the release of its asset snapshot, a wallet address associated with the Huobi exchange was discovered transferring 10,000 ETH to deposit wallets on Binance and OKX.

10,000 ETH were transferred from Huobi to deposit wallets on Binance and OKX after Huobi made the asset snapshot of the asset reserve public. The Huobi 34 now only has 4,044 ETH remaining, down from 14,858 at the time of the picture.

Blockchain researcher Colin Wu drew attention to transactions on Etherscan that show Huobi had 14,858 ETH in its most recent snapshot, which has since dropped to 2,463.5 ETH as of the time of writing.

Huobi has not yet responded publicly to the allegations made by the cryptocurrency community, however founder Lin Han shared their version of events. Han asserted that the disputed image was captured on October 19, two days prior to the unintentional transfer of 320,000 ETH by

Han emphasised once more that’s funds arrived following the publication of the snapshot and shared the necessary documentation for the community’s satisfaction.

The community has been required to maintain its vigilance pending an official pronouncement due to the potential for various cryptocurrency exchanges to collaborate in order to manipulate investor funds. Despite Cointelegraph’s request for response, Huobi has not yet provided one.

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Blockchain technology’s immutability will make it possible for investors and investigators to delve into the history of the exchange’s operations as more crypto exchanges make their cold storage information public.

While disclosing wallet addresses, Binance stated,

Our objective is to enable users of our platform to be aware and make informed decisions that are in line with their financial goals.

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