Binance Saved Customers’ Fund with B-Tokens Collateral by ‘Mistake’: Report

Binance Introduces B-Tokens Using a Novel Proof-of-Reserves Framework
The biggest cryptocurrency exchange in the world based on trading volume, Binance, recently acknowledged that it had “inadvertently” stored customer money and collateral for a portion of the tokens it produces. Bloomberg reports that the exchange has released ninety-four Binance-peg tokens, or “B-Tokens.” But in a cold wallet known as “Binance 8,” over half of the reserves of these tokens are kept alongside the money of customers. Additionally, Bloomberg noted that the wallet’s reserve of tokens currently exceeds the total number of B-Tokens distributed by the top cryptocurrency exchange. Based on their estimates, they estimate that the mixing has affected approximately $539 million in B-Tokens.

Other cryptocurrency exchanges have also lately disclosed proof-of-reserves (PoR) for their holdings of digital assets in order to reassure users of their financial stability. With around $7.5 billion in digital asset holdings, the platform is also over-collaterized, according to the PoR released by OKX, a cryptocurrency exchange based in the Seychelles, last week. According to Finance Magnates, OKX customers own a total of 117,682, 1,178,993, and 2,955,696,824 BTC, ETH, and USDT. The exchange’s reserve ratio for these digital assets was 105%, 101%, and 101%, respectively.

Additionally, Biget, a cryptocurrency exchange, and Singapore-based Crypto.com recently introduced their PoRs. The main cryptocurrency asset-reserve ratios on Crypto.com are as follows: XRP (101%), BTC (102%), ETH (101%), USDC (102%), USDT (106%), and USDT (106%). The others are Mana (102%), Hyperlink (101%), Shiba Inu (102%), and Dogecoin (101%).

A new Proof of Reserves concept called B-Tokens, which offers a safe and regulated means to hold money without taking on extra risk, was also recently unveiled by Binance. The automated error reporting feature of this system enables users to effortlessly monitor and report any probable problems with their money. It is also intended to guarantee that all funds are backed by the maximum amount of collateral that is feasible.