moved 127,351 (worth $2 billion) to verify with the auditors that they have control over the claimed address.

The transfer of a large amount so today from to an unknown wallet caused a lot of shock in the community . In response, Binance CEO Changpeng Zhao (CZ) clarified that the transfer is part of an ongoing audit at Binance.

“This is part of the Proof of Reserve Test. The auditor asks us to deposit a specific amount to show we control the wallet. And the rest goes to the Change Address, which is a new one,” stated CZ. He added that the exchange moved the funds to a new address under their control.

Last week, Binance officially introduced its first reserve algorithm system, an algorithm intended to prove that it holds the necessary reserves to cover all customer deposits. Binance is currently working on a more complete audit.

Pressure on exchanges concentration in applying “proof of reserve” has increased significantly after the collapse of the exchange . By publishing both total assets and liabilities, exchanges can show that they have reserves available to meet customer withdrawal requests. However, these initial reserves do not necessarily show the full picture as they do not provide details of the exchange's liabilities.

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Reserves can be displayed in two ways or a combination of both. The first is by having the reserves audited by independent third-party auditors while the second is by providing a public list of addresses containing various assets. Each type has different benefits and drawbacks.

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