- Binance clarified that the asset transfers were routine accounting adjustments and were not a sell-off of user funds.
- February proof of reserves highlighted reduced surplus holdings. However, it also indicated increased BTC and USDT deposits.
- $8 Billion moved in one month, which sparked community speculation on Binance’s asset management strategy.
Binance recently faced a scrutiny. This controversy erupted after an X user, AB Kaui Dong, raised concerns about unusual onchain activity.
Dong suggested that the exchange had sold a significant portion of its Bitcoin (BTC) and Ethereum (ETH). They did this by converting them into the stablecoin USDC.
Reports estimated that Binance had liquidated 94% of its Bitcoin, 99.9% of Ethereum, and 99% of Solana in January.
However, Binance has denied these claims. In an X post on February 11, they explained that the movements were part of its routine treasury accounting process. The exchange stated,
“Binance is not selling assets. This was simply an adjustment in the Binance treasury’s accounting process. User funds are SAFU, as always.”
Additionally, it was noted that these assets primarily consisted of Binance’s past revenue and were not user funds. Following Binance’s clarification, Dong confirmed that the exchange appeared safe.
Binance’s Proof of Reserves Reflects Asset Adjustments
BNB released its February proof of reserves, showing adjustments in the excess cryptocurrency held by the exchange. The report indicated that Binance had reduced surplus holdings compared to January.
In January, Binance held an 8.15% surplus in Bitcoin and a 12.12% surplus in USDT. By February, these figures had declined to 0.45% and 1.01%, respectively.
Despite the reduction, Binance saw an increase in total deposits. With this, its Bitcoin holdings rose from 575,296 BTC in January to 615,816 BTC in February. Similarly, its USDT balance grew from 24.6 billion to 27.3 billion.
At the same time, the report highlighted that Binance converted most of its assets into USDC. However, BNB Coin saw the lowest reduction ratio, with only a 16.6% decrease.
The market conditions in January showed that most cryptocurrencies were at historical highs. This may have influenced Binance’s reserve management strategy.
Community Observes Large-Scale Asset Movements
The crypto community analyzed Binance’s proof of reserves and noticed changes in major holdings. Excess Ethereum reserves declined from 4.2% to zero, while USDC reserves increased from 32.32% to 41.28%.
Data from Arkham Intelligence indicated that Binance had moved a portion of its Bitcoin holdings. Given that USDT balances also dropped, some community members speculated. Per their speculations, Binance transferred these assets to other addresses rather than selling them.
$8 Billion in Crypto Transferred in One Month
Between January and February, Binance transferred approximately $8 billion worth of assets. This included $4 Billion in Bitcoin, $3 Billion in USDT, and $700 Million in Ethereum.
The exact reason remains unclear. However, Binance maintains that the movements were part of its internal accounting processes, not an asset sell-off.
The exchange has reassured users that funds remain secure. Binance’s asset management strategies are still being closely observed, owing to increased criticism from the cryptocurrency community.
Disclaimer
In this article, the views and opinions stated by the author or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
