Changpeng “CZ” Zhao, CEO of Binance, indicated that “abnormal” trading of cryptocurrencies on the system seems to be market behavior after the business determined that the activity in issue had nothing to do with hacked accounts or disclosed API credentials.
According to the executive’s recent tweet, a user transferred funds into a trading account and bought certain coins. Soon after, others followed suit. Binance temporarily prohibited withdrawals from certain profitable accounts. The decision was changed after the exchange received several social media complaints from people in various nations.
The Intervention of Binance
Several Binance users observed unusual transactions of particular pairings, including assets such as OSMO, FUN, SUN, ARDR, and GLM, over the weekend. This raised suspicions that hackers had obtained certain users’ API credentials via 3Commas and were utilizing those accounts to make the deals. Binance denied any breach or API compromise and guaranteed investors that the funds are “SAFU.”
Proof of Reserve Complications
Binance is battling with confidence in centralized systems in addition to security measures. Last week, the exchange published proof of reserves to assuage customers’ anxieties about its viability while assuring them that their monies are secure. However, its competitor, Kraken’s Jesse Powell, pointed out “red flags” in the audited report.
According to industry analysts, the audit company Mazars’ assessment failed to instill trust in Binance’s finances. The study provided no details on the strength of internal controls or how the crypto exchange’s systems liquidate assets to pay margin debts.