Binance, the largest crypto exchange network, published its Proof-of-Reserve (PoR), and some users reported deficits in Bitcoin Cash (BCH) and Polkadot reserves.
However, the post about deficits in reserves was flagged as misinformation after several users criticized the Redditors behind the information. Due to the troubles seen in FTX, much of the community has lost confidence in crypto.
A Redditor called u/big–if-true/ mentioned that Binance has deficits in their BCH reserves. Binance released its PoF yesterday, listing the reserves held for different crypto assets. Bitcoin cash reserves caught the eye of this Redditor.
This Redditor noted that Binance claims to have a balance of 450k BCH in cold wallets. According to the Redditor, on-chain data indicates that the cold wallet only holds 100k BCH.
The user insinuated that Binance unknowingly listed their liabilities rather than the actual balance of BCH held in cold wallets. While concluding the post, the Redditor said that anyone who still keeps their BCH on Binance is under serious problem. Simply put, the Redditor thinks that the cold wallet balance is insufficient to cover the amount of Binance pegged BCH.
A Redditor called IRefuseToGiveAName responded by saying;
“Looks like part of it is just in another wallet, which has received exactly two deposits. One from the officially listed Binance wallet. Another one has a balance of 352,319. Did anyone even try to look further than the surface?”
Another user responded to the Polkadot-related post saying that Binance must have tons of Dot-related wallets. Generally, investors might be spreading panic.
The FUD caused by FTX triggered the spread of this misinformation about other exchanges. FTX is currently in turmoil with lacking liquidity to complete its services. Reports indicate that FTX had billions of dollars in deficit. It appears that FTX used much of its client’s deposits to fund Alameda research and other investments. The fund deficits in FTX led to calls for exchanges to release proof of funds. Therefore, any slight mistake or misunderstanding in PoF statements at the moment will trigger questions from the community.
