Crypto exchange giant Binance revealed that it has transferred a substantial amount of Bitcoin (BTC) to a new cold wallet address. The move, which involved the transfer of hundreds of millions of dollars’ worth of BTC, aims to enhance security measures while assuring users that their funds remain safe.
On Monday, Binance’s new cold storage wallet received 15,000 BTC, equivalent to approximately $399 million, according to data from Blockchain.com. Additionally, a larger transfer of 117,000 BTC, valued at over $3 billion, was made from an existing Binance cold wallet address to another new address. Data from Bitinfocharts indicates a total decrease of 130,000 BTC from the exchange’s cold wallet.
Ensuring User Fund Safety
Despite the significant movement of funds, Binance assured users that the safety of their assets remains intact. User funds are securely held in cold storage, which means they are kept offline and isolated from potential cyber threats. Cold storage is a widely recognized security practice in the crypto industry, providing an additional layer of protection against hacks and unauthorized access.
Binance currently holds the largest Bitcoin balance among all exchanges, with a total of 510,425 BTC, according to Coinglass. In comparison, Coinbase Pro holds 486,568 BTC. This substantial BTC holding reinforces Binance’s prominence in the crypto market and highlights the trust placed in the exchange by its users.
While Binance continues to make strides in security measures, it faces legal challenges, including a recent lawsuit filed by the U.S. Securities and Exchange Commission (SEC). The SEC accused Binance of securities law violations related to the alleged “commingling” of user assets with its American subsidiary, Binance.US. However, the judge denied the SEC’s request to freeze assets held by Binance.US.
To address concerns regarding transparency and asset verification, Binance previously pledged to implement a “proof of reserves” system. This blockchain-based auditing mechanism would ensure that the exchange possesses users’ crypto assets. However, former Kraken CEO Jesse Powell criticized Binance’s proof of reserves system, highlighting potential flaws in the process.
In contrast, Coinbase, as a publicly-traded company, undergoes audits by renowned accounting firm Deloitte, adding an extra layer of credibility to its asset verification process.