Binance has transferred more than $2 billion in BTC as part of a PoR audit

Binance has transferred more than $2 billion in BTC as part of a PoR audit

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Answer Binance has transferred more than $2 billion in BTC as part of a PoR audit

The large influx of funds belonging to Binance has set off alarm bells in the cryptocurrency community today.

According to a tweet from Whale Alerts, Binance withdrew over 127,000 BTC in a single transaction, depositing the cryptocurrency to an anonymous wallet address.

Of course, as expected, under the current circumstances, feelings of fear and anxiety have increased among the crypto community.

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With crypto companies rushing to run their own Proof of Reserves and some companies transferring large sums of money into private wallets before shutting down, thinking of the worst is warranted.

Binance and its mysterious move:

Soon after, the CEO of Binance clarified that it was all just a test required by an independent auditor to prove that Binance actually controls the cryptocurrencies it claims to own.

The clarification of the “CZ” calmed the spirits of the speculators, stopping a sharp decline of more than 5% at 1 am UTC.

Binance proves it by transferring exactly 127,351 BTC, which is roughly $2 billion at the time of writing.

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The anonymous wallet that received the funds was also owned by Binance.

Binance notes that it had to conduct this test as a way to provide transparency and demonstrate ultimate control over its assets.

The auditor sought to prove that Binance was indeed able to move a large amount of money without affecting its operability.

Proof of PoR Reserve and the need to restore trust:

Due to the FTX crash, many crypto companies have submitted solvency reports to prove that their users’ funds are being backed up.

The approaches varied, with Binance initially opting to exclusively use Merkle Tree, but others, such as Grayscale, flatly refused it, citing security reasons.

However, others, such as Mexican exchange Bitso, have published their own version of the extended proof or reserve, and have pledged to implement other measures to increase its reliability, including zero-knowledge tests, external audits, conversations with regulators, and the publication of periodic reports.

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But there are also critics of the current back-up testing apps.

The most recent example is former Kraken CEO Jesse Powell, who criticized Binance’s failure to implement external audits and include commitments in its reporting.

Even with all these efforts from crypto companies, there seems to be a waning of confidence.

Hardware wallets are reporting record sales, centralized crypto firms are now managing less money, and self-wallets are on the rise.

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