New data shows that one of the largest Bitcoin exchanges in the market is carrying large amounts of Ethereum (ETH). It was previously on the agenda with similar news on Gate.io and Crypto.com.
Abnormal Ethereum transactions from Bitcoin exchange
As you follow on Kriptokoin.com, this week all central cryptocurrency exchanges shared their proof of reserve following the bankruptcy of FTX. Now, an abnormal amount of Ethereum (ETH) is flowing into Bitfinex’s hot wallets. According to the data, the exchange’s ETH reserve has increased from 6,000 to 50,000. It then went up to 200,000 ETH in a short time.
Address 0xd2 received 100,000 ETH from 0xcff, the WrappedTokenGateway specifically for wETH. These 100,000 ETH were first sent to an intermediary address and then to the Bitfinex hot wallet. Later, the same wallet received another 100,000 ETH from the wETH gateway from another address.
Later, this 100,000 ETH again flowed into the Bitfinex hot wallet through an intermediary. In this way, Bitfinex’s hot wallet was filled with 203,000 ETH in just one hour.
Bitfinex currently holds 2 million Ethereum
The exchange currently has a total of 2 million Ethereums, of which 1.4 million have been confirmed. As a result, it currently carries 4 times as much Ethereum as its announced reserves. Hot wallets can be hacked more easily than cold wallets. Therefore, new data shows that the exchange is currently transferring some of these Ethereums to cold wallets. There are currently about 15 cold wallets owned by Bitfinex. None of these have been withdrawn from Ethereum in the last 24 hours.
After the events in FTX, most of the investors had to withdraw their money from the exchanges. Therefore, transactions from Bitfinex wallets are not a big deal for now. Also, this d2 address received $100 million from Tether Treasury about three months ago.
Bitcoin exchanges used borrowed funds for proof of reserve
The practice of proof of reserve, which became mandatory with FTX’s bankruptcy, also revealed secret transactions between exchanges. A recent report shows that Crypto.com sent 320,000 ETH to Gate.io just two days after making their cold wallet public. After the disclosures, Kris Marszalek, CEO of Crypto.com, said that the funds were transferred by mistake. Twitter reported that they received back the funds they sent to Gate.io shortly after.
Wu Blockchain, a later Blockchain researcher, claimed that Gate.io used this fund to show proof of reserve. Researchers suggest that Gate.io used these Ethereums in their proof of reserve released Oct. More details can be found in this article.
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