Binance Holdings Ltd., the world’s largest crypto platform, acknowledged that it mistakenly keeps collateral for some of the tokens it issues in the same wallet as exchange-customer funds, Bloomberg News reported. Reserves for almost half of the 94 coins that Binance issues, known as Binance-peg tokens or “B-Tokens,” are currently stored in a single wallet called “Binance 8” which also holds customer assets, according to listings visible on its website on Monday. The wallet contains significantly more tokens in reserve than would be required for the amount of B-Tokens that Binance has issued, indicating that collateral is being mixed with customers’ coins rather than being stored separately, as has been done for other Binance-peg tokens according to the company’s own guidelines. “‘Binance 8’ is an exchange cold wallet. Collateral assets have previously been moved into this wallet in error and referenced accordingly on the B-Token Proof of Collateral page,” a Binance spokesperson said. “Binance is aware of this mistake and is in the process of transferring these assets to dedicated collateral wallets.” Crypto exchanges such as Binance have attempted to be more transparent about their holdings following the collapse of rival platform FTX in November, which turned the management of reserves into a hot-button issue for the crypto industry. FTX, the Bahamas-based exchange founded by Sam Bankman-Fried, allegedly allowed its sister trading firm Alameda Research unfettered access to customer assets to fuel its own bets — and with billions of dollars at stake, customers are eager to spot any potential warning signs of trouble elsewhere.
