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24h Market Cap Change $-0.84 Experts claim proof-of-reserves may be suspicious because…

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  • might have transferred from exchanges to cold wallet shortly before asset declaration
  • Research experts claim exchange could be trading with customer funds and also be in debt

Unpleasant events rocked the crypto ecosystem lately, which subsequently led exchanges to release their proof-of-reserves, such as As of 11 November, Kris Marszalek, the CEO of, tweeted that the company’s reserves audit was in progress. 

However, the exchange later published details of assets Marszalek claimed were in cold wallets. After this revelation, new reports emerged that might have “rushed” to move its funds from exchanges after Binance CEO, CZ, recommended the practice.

“You need to come out clean”

Crypto investigator and contributor to the Synthetix [SNX] protocol, Adam Cochran, notified the community of an Etherscan transaction that might have put in a bad light. According to Cochran, the exchange wallet setup showed signs of distrust. seemed to have held some assets that it listed on several exchanges. According to the Etherscan transaction, sent 1500 Ethereum [ETH] out of its cold wallet three days ago. The same cold wallet had also transferred assets to Deribit,, Binance, and Huobi around the same period. transfers to exchanges

Source: Etherscan

The suspicion was rooted in the exchange’s claim that its users’ assets were safe in cold wallets. Meanwhile, inflows were passing through deposit contract addresses that were created less than three months ago.

Interestingly, Cochran was not the only one who alerted the crypto community of the transactions. Another researcher at GMB Ventures, Churchupcontrol, a blockchain informational portal, might be using customer funds for arbitrage. 

According to him, the exchange had taken advantage of price differences on Binance and to make ‘risk-free’ money. He also added proof that recently engaged in the act as close as ten days back.

This implied that the exchange quickly arranged its public asset declaration to save face. Hence, it was also likely that customer funds were at risk of exploitation. reserves and customer funds

Source: Etherscan

Loans, accidents, and the potential to follow suit

In addition, Churchupcontrol claimed that the FTX collapse led to making rash decisions. You would recall that its proof-of-reserves showed no debt, according to Nansen. However, panic, per the FTX scrutiny, led to a change in the details of its margin table.

This also included taking a loan profit. Hence, the researcher noted that the exchange might own fewer assets than it claimed to have. It was also recently that claimed accidental transfers to

At press time, it seemed that CZ had gotten wind of the information. While reacting to it, the Binance CEO said that it was a clear sign of problems if exchanges had to move funds before declaring assets. Meanwhile, neither the exchange’s official account nor the CEO had reacted to the development. 


Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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