Shortly after publishing its asset snapshot, the Huobi exchange was found to have sent 10,000 ether to deposit addresses at Binance and OKX.
Crypto exchanges have decided unanimously to share proof of reserve with the public as a way to showcase legitimacy in the wake of growing mistrust among crypto investors following the FTX collapse. However, on-chain investigations have uncovered some oddities that point to possible fraud or market manipulation.
On Oct. 21, 2022, just two days after Crypto.com disclosed its cold storage details, researchers discovered a transfer of 320,000 Ether to Gate.io. But Crypto.com’s CEO Kris Marszalek denied any wrongdoing, saying the money was moved accidentally and then returned to its original storage.
In a Reddit thread dated October 28, Solidity developer Shegen claimed that Gate.io used Crypto.com’s funds to create its proof of reserves snapshot, prompting the question:
I needed to top off the proof, and this did the trick. There’s no hope for Gate and Crypto.com.
Huobi is also suspected by the crypto community of attempting a similar manipulation. Soon after publishing its asset snapshot, the Huobi exchange was discovered to have transferred 10,000 ether to deposit addresses on Binance and OKX.
Ten thousand Ether were moved from the address 0xca…c3fc (Huobi 34) to the deposit addresses of Binance and OKX after Huobi published the asset snapshot of the asset reserve. In contrast to its 14,858 ETH balance in the snapshot, the Huobi 34 now only has 4,044 ETH remaining. https://t.co/wrphZxadBM pic.twitter.com/B2lRXMF8su — Cryptocurrency advocate Wu Blockchain (@WuBlockchain) November 13th, 2022
The transactions on Etherscan, as pointed out by blockchain researcher Colin Wu, show that Huobi showed 14,858 ETH in its most recent snapshot, though that number has since dropped to 2,463.5 ETH as of this writing.
While Huobi has not responded publicly to the allegations made by the cryptocurrency community, Gate.io’s founder Lin Han has shared their side of the story. Specifically, Han claimed that the relevant snapshot was taken on October 19, two days before Crypto.com’s erroneous transfer of 320,000 ETH.
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Using a snapshot taken on Oct.19 2022, two days before https://t.co/PHnRJks7YS’s 320,000 ETH deposit to https://t.co/fMCiAnAueR, https://t.co/fMCiAnAueR and Armanino collaborated on the Proof of Reserves.
Just look at the evidence I’ve provided.
Author: Lin Han (@han gate)
November 13th, 2022
Han also provided supporting evidence to reassure the community that Crypto.com’s funds arrived after the snapshot was released.
Because of the widespread concern that cryptocurrency exchanges may be colluding to steal from their customers’ accounts, the industry as a whole is on high alert until they hear otherwise.
Cointelegraph has reached out to Huobi for comment, but the company has not yet responded.
Related: Binance shares wallet addresses and activity after proof-of-reserve pledge
Because blockchain data cannot be altered, investors and investigators will be able to look into the exchange’s entire transaction history as more cryptocurrency exchanges make their cold storage details public.
Binance, while disclosing wallet addresses, said, “Our objective is to allow users of our platform to be aware and make informed decisions that are aligned with their financial goals.”
Continue Reading on Coin Telegraph
Disclaimer: This isn’t financial advice; it’s just for education. Crypted Crypto can’t guarantee its accuracy. Every investment and trade carries some risk, so always do your own research. Invest only what you can afford to lose.
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