transferred nearly 85% of ETH reserves to in October, CEO assures it was accidental


The Twitter community is on fire, discussing hidden motives behind asset transfers between and that took place in October.

The exchange’s CEO Kris Marszalek responded to speculation and said the transfer was done accidentally and had since been reverted.

According to Marszalek, the funds were being sent to a new cold storage address but were mistakenly sent to a whitelisted address. supported the narrative and reiterated in a Twitter post that the proof of reserves audit did not include the ETH transferred from The firm also shared the transaction ID that confirmed all funds were returned to

The transfer

Blockchain transaction data from Etherscan indicates that transferred 320,000 Ethereum (ETH) to a wallet that subsequently transferred the assets to a wallet on Oct. 21. At the time, the assets were valued at $415.9 million.

Exchanges often move funds around for liquidity purposes. However, the timing of the transaction caused speculation among the community.

On Oct. 28, provided its proof of reserves and made it open source. The report indicated that has enough ETH reserves to overcollateralize user funds by 104%. However, the report also states that the data for the proof of reserves audit was obtained on Oct. 19, i.e. prior to the transfer of 320,000 ETH.

On Nov. 11, Marszalek announced on Twitter that the exchange has $3.0 billion in reserves, and shared the BTC and ETH cold storage wallets. The move was aimed at quelling fears of insolvency — Marszalek added that a more detailed proof of reserves report will be shared in the coming days.

Kris’ list of ETH cold wallets, included the address which transferred the 320,000 ETH to The list also included the address where transferred back roughly 285,000 ETH tokens between Oct. 25 and Oct. 30.

In light of the rumors of’s proof of reserves being inflated by’s reserves, Marszalek also posted a Twitter thread.

Marszalek explained that funds from’s custody systems can only be moved to whitelisted hot wallets, cold wallets, and authorized third-party exchange accounts. The funds were moved to’s corporate account with instead of the intended cold wallet.

Twitter users claim sinister motive behind transfers

Despite the assurances by and, many Twitter users allege that the exchanges are borrowing funds from each other to prop up their proof of reserves.

Blockchain reporter @WuBlockchain pointed out that after releasing a snapshot for proof of funds, Huobi Global sent 10,000 ETH to Binance and OKX wallets. According to the user, the address showed 14,858 ETH as reserves during the snapshot while it held 4,044 ETH after the transfers.

The wallet referred to above contained 18,225 ETH at the time of writing, according to CryptoSlate’s analysis of Etherscan data.

Some Twitter users connected the Huobi situation to that of and, alleging that the exchanges are inflating the reserves and transferring back assets after the snapshot is submitted. The users saw the transfers as unconfirmed proof that support their theory of’s insolvency.

These doubts and fears were further stoked by Binance CEO Changpeng ‘CZ’ Zhao, who cautioned users against exchanges that carry out large asset transfers before or after publishing proof of funds.

Marszalek has repeatedly assured users that transferred the funds to in a clear mistake. And history supports his version of the story — sued a customer earlier this year after mistakenly transferring $10.5 million to the user.

But with FTX boss Sam Bankman-Fried assuring users that FTX US is “fully liquid,” a day before filing for bankruptcy, the crypto ecosystem’s trust is shaken and all claims are being taken with a grain of salt.

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