{"id":600833,"date":"2023-01-24T18:52:43","date_gmt":"2023-01-25T00:52:43","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/01\/24\/binance-mixes-user-funds-with-b-token-collateral-by-mistake\/"},"modified":"2023-01-24T18:52:43","modified_gmt":"2023-01-25T00:52:43","slug":"binance-mixes-user-funds-with-b-token-collateral-by-mistake","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/01\/24\/binance-mixes-user-funds-with-b-token-collateral-by-mistake\/","title":{"rendered":"Binance mixes user funds with B-Token collateral by \u2018mistake\u2019"},"content":{"rendered":"
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\"Binance Binance mixes user funds with B-Token collateral by \u2018mistake\u2019<\/span> Monika Ghosh \u00b7<\/span> 10 hours ago<\/span> \u00b7 2 min read<\/span> <\/span> <\/span> <\/span> <\/span><\/p>\n

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Binance has stored a significant amount of reserves for its B-Tokens in an exchange cold wallet containing user funds.<\/p>\n

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2 min read<\/span><\/p>\n

Updated:<\/span> January 24, 2023 at 1:53 pm<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n

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\"Binance<\/p>\n

Cover art\/illustration via CryptoSlate<\/p>\n<\/div>\n<\/div>\n

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World\u2019s largest crypto exchange Binance has acknowledged that it has mistakenly stored token reserves and user funds in the same wallet, according to a Bloomberg report<\/a>.<\/p>\n

Reserves for nearly half of the 94 tokens issued by Binance, referred to as \u2018B-Tokens,\u2019 are stored in a single wallet called \u201cBinance 8,\u201d according to its website<\/a>. The wallet contains<\/a> more assets in reserve than required as collateral for the issued B-Tokens.<\/p>\n

For instance, Binance 8 had a reserve of almost 22,700% for OriginToken\u2019s OGN, as of Jan. 23.\u00a0This indicates that the wallet also contains user assets on the exchange.<\/p>\n

Binance issues its own version of Ethereum<\/a> (ETH), USD Coin<\/a> (USDC), and other cryptocurrencies to make them usable on other blockchains like the BNB Smart Chain. These Binance-pegged tokens are known as B-Tokens and are supposed to be backed by 1:1 reserves of the currencies they are based on.<\/p>\n

Mixing of B-Token collaterals with customer assets is contrary to Binance\u2019s own guidelines<\/a>. A Binance spokesperson told Bloomberg:<\/p>\n

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\u201c\u2018Binance 8\u2019 is an exchange cold wallet. Collateral assets have previously been moved into this wallet in error and referenced accordingly on the B-Token Proof of Collateral page.<\/p>\n

Binance is aware of this mistake and is in the process of transferring these assets to dedicated collateral wallets.\u201d<\/p>\n<\/blockquote>\n

The mixing of B-Token collateral with user funds makes it difficult to ascertain if Binance has enough reserves to back the B-Tokens it has issued.<\/p>\n

The Binance spokesperson said that Binance has ensured that all user assets held by the exchange are \u201cbacked 1:1\u201d at all times. The spokesperson chalked up the above-mentioned \u201cmistake\u201d to \u201chistorical operational oversights,\u201d but did not confirm when the issue was identified.<\/p>\n

Binance has minted over $539 million worth of the 41 B-Tokens that have their collateral sitting in the Binance 8 wallet, according to Bloomberg.\u00a0Binance 8 currently holds $1.8 billion worth of B-Token-related assets while in total, it has more than $16.5 billion in different crypto assets, as per the report.<\/p>\n<\/div>\n<\/div>\n

Read More<\/a>
\n Monika Ghosh<\/p>\n","protected":false},"excerpt":{"rendered":"

Binance mixes user funds with B-Token collateral by \u2018mistake\u2019 Monika Ghosh \u00b7 10 hours ago \u00b7 2 min read Binance has stored a significant amount of reserves for its B-Tokens in an exchange cold wallet containing user funds. 2 min readUpdated: January 24, 2023 at 1:53 pm Cover art\/illustration via CryptoSlateWorld\u2019s largest crypto exchange Binance<\/p>\n","protected":false},"author":1,"featured_media":600834,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22426,31783],"tags":[],"class_list":{"0":"post-600833","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-binance","8":"category-mixes"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/600833","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=600833"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/600833\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/600834"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=600833"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=600833"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=600833"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}