CEO of Binance, Changpeng Zhao has stated that the “abnormal” trading of altcoins on the platform is simply market behavior as the company revealed that it had nothing to do with leaked API keys or compromised accounts.
According to CZ’s latest tweet, funds were deposited by a user into a trading account and which was used to purchase certain coins. Shortly after, others followed suit. Which led Binance to temporarily restrict withdrawals on some of the profiting accounts. This was reversed after the exchange received several complaints on social media from various countries.
Over the weekend, several users reported abnormal trades of certain pairs on Binance which involved assets such as SUN, OSMO, ARDR, GLM, and FUN. This raised concerns about whether hackers had gained access and stolen some users’ API keys via 3Commas and used the accounts to execute the trades. Binance however denied reports of any API compromise or hack and gave assurance that the funds are “SAFU.”
Binance is struggling with trust in centralized platforms in addition to security checks. Last week, the exchange revealed its proof of reserves to put an end to the concerns over its solvency and also assure users that funds are safe. However, Kraken’s Jesse Powell – a rival to the exchange has highlighted “red flags” in the audited report.
Experts in the industry said the report released by the audit firm Mazars failed to gain the confidence of investors in Binance’s finances. As it was void of information concerning the quality of internal controls and how the crypto exchange’s systems cover margin loans in liquidating assets.
Former chief of the SEC Office of Internet Enforcement, John Reed Stark, who also is a vocal crypto critic, also said that the audited report “failed to address the effectiveness of internal financial controls” and also went further to add that: “The audit did not express an opinion or assurance conclusion and also failed to vouch for the numbers. Having worked at SEC Enforcement for [18-plus years], he identified that as a ‘red flag.
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