Main navigation

Is Something Shady Happening with Binance? Breakdown of $2 Billion "Audit" Transaction

Tue, 11/29/2022 - 11:42
article image
Arman Shirinyan
Panic arises around Binance after appearance of $2 billion transaction
Is Something Shady Happening with Binance? Breakdown of $2 Billion "Audit" Transaction
Cover image via

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.

Read U.TODAY on
Google News

The massive $2 billion transaction that occurred on Binance-related addresses on the blockchain recently puzzled both experienced and newbie investors in the crypto space. Shortly after, an explanation was offered, suggesting that it is part of the exchange's audit. However, not everyone calmed down and even VC-tier investors are seeking details.

Not part of audit

According to Mira Christanto, a VC investor and manager of a $7 billion TradFi equities fund, a large transaction cannot be a part of an audit since the methodology used by most auditors does not include signing and making any kind of transaction on the network.

Previously, Binance or its representatives did not provide details on the company that conducted the audit and did not comment further. Lack of transparency caused even more disruption to the industry.

Christanto added that the auditor will be physically present and would ask exchange representatives to sign a message using the private keys of addresses holding the funds. The requirement to move funds is unusual, and no such practice exists among auditors. But users quickly made a correction.

UTXO is to blame

Auditors indeed did not ask Binance to move $2 billion for whatever reason. However, some blockchain-based operations took place on the market, and such a large transaction volume is the result of a UTXO transaction scheme that sends out the whole balance to another address and then returns it after deducting the sent sum.

Dogecoin (DOGE) Price Suddenly Spikes 10% in Hours

Technically, one of Binance's wallets could have transferred or signed some kind of operation, which is technically a transaction for a blockchain. Because of UTXO, the whole balance of the wallet was transferred and then returned to the exchange's address.

article image
About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.