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Huobi and Gate.io under fire for allegedly sharing snapshots using loaned funds

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Huobi and Gate.io under fire for allegedly sharing snapshots using loaned funds

A wallet address linked to the Huobi exchange was found transferring 10,000 ETH to Binance and OKX deposit wallets soon after releasing its asset snapshot.

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Huobi and Gate.io under fire for allegedly sharing snapshots using loaned funds

To counter the rising mistrust among crypto investors following the FTX collapse, crypto exchanges unanimously decided to share proof of reserve with the public as a way to showcase legitimacy. However, certain anomalies found during on-chain investigations suggest foul play and market manipulation.

Just two days after Crypto.com made its cold storage information public, investigators found that 320,000 Ether (ETH) was sent to Gate.io on Oct. 21, 2022. However, Kris Marszalek, the CEO of Crypto.com, dismissed any wrongdoing by stating that the funds were transferred accidentally and were eventually returned back to the original storage.

Gate.io released asset snapshot on Oct. 28. Source: Colin Wu

On Oct. 28, Gate.io released its proof of reserves snapshot, which, Solidity developer Shegen alleged, was done using Crypto.com’s funds, and questioned:

“This was topping up for the proof. Gate and crypto.com are fucked?”

Moreover, the crypto community suspects Huobi of attempting a similar manipulation. A wallet address linked to the Huobi exchange was found transferring 10,000 ETH to Binance and OKX deposit wallets soon after releasing its asset snapshot.

After Huobi released the asset snapshot of the asset reserve, 10,000 ETH was transferred from 0xca…c3fc (Huobi 34) to Binance and OKX deposit wallets. The Huobi 34, which had 14,858 ETH at the time of the snapshot, currently has only 4,044 ETH left. https://t.co/wrphZxadBM pic.twitter.com/B2lRXMF8su

— Wu Blockchain (@WuBlockchain) November 13, 2022

Blockchain investigator Colin Wu pointed out the transactions on Etherscan, which proves that Huobi had shown 14,858 ETH in its latest snapshot, which has since fallen down to 2,463.5 ETH at the time of writing.

Huobi’s wallet information. Source: Etherscan

While Huobi is yet to publicly retaliate against the claims put forth by the crypto community, Gate.io founder Lin Han revealed their side of the story. Han argued that the snapshot in question was taken on Oct. 19, two days before Crypto.com’s accidental fund transfer of 320,000 ETH.

— Lin Han (@han_gate) November 13, 2022

Han further reiterated that Crypto.com’s funds came in after the snapshot was released and shared relevant proof for the community’s satisfaction.

The possibility of multiple crypto exchanges working together to manipulate investor funds has forced the community to keep their guard up until an official statement. Huobi has not yet responded to Cointelegraph’s request for comment.

Related: Binance shares wallet addresses and activity after proof-of-reserve pledge

As more crypto exchanges make their cold storage information public, the immutable nature of blockchain technology will allow investors and investigators to dive into the history of the exchange’s operations.

“Our objective is to allow users of our platform to be aware and make informed decisions that are aligned with their financial goals,” said Binance while revealing wallet addresses.

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Whale Watching: The Top 5 Crypto Transactions of the Week

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Whale Watching: The Top 5 Crypto Transactions of the Week

Bitcoin takes the throne for this week’s 127,351 BTC ($2,062,504,721) whale transfer out of Binance into an unknown wallet on Nov. 28, 2022, while an Ethereum whale transferred about 231,782 ETH ($274 million) on Nov. 28, 2022.

Binance reportedly paid $0.42 in transaction fees to move the large volume of Bitcoin in a bid as part of an audit process with the goal of greater transparency following the collapse of FTX. It assured users of the exchange that all their funds were safe.

Three Major Whale Transactions Done by Binance, Admits CZ

Additionally, the crypto exchange made at least two other whale transactions of around 200,000,000 BUSD, its native stablecoin, on Nov. 30, 2022. Binance was responsible for 81% of the roughly $3.2 billion of all whale transfers in the past week, with these two similar transfers tied for the fifth position.

Binance CEO Changpeng ‘CZ’ Zhao took to Twitter to allay fears of malpractice at the exchange, stating that a third-party auditor requires Binance to transfer a certain amount of crypto to itself to prove that the company owns the wallet. The remainder goes to another address, called a “Change Address.”

This is part of the Proof-of-Reserve Audit. The auditor require us to send a specific amount to ourselves to show we control the wallet. And the rest goes to a Change Address, which is a new address. In this case, the Input tx is big, and so is the Change. Ignore FUD! https://t.co/36wUPphIZk pic.twitter.com/2NkH5L5J9j

— CZ 🔶 Binance (@cz_binance) November 28, 2022

Other cryptos coming in close behind Binance’s Bitcoin transfer is the second-largest cryptocurrency by market capitalization, Ethereum, with almost $560 million transferred in two transactions of 231,736 ETH ($272 million) and 231,782 ETH ($274 million). Validators were later rewarded with $1.32 and $2.51 in transaction fees.

In both cases, the source and destination addresses were unknown. Crypto Twitter has speculated that the first transaction could have involved Ethereum co-founder Vitalik Buterin. Earlier this year, he reportedly dumped 3,000 ETH to DeFi protocol Uniswap V3 shortly after news broke of the failure of FTX.

Fueling the speculation was the fact that Buterin had moved 30,000 ETH out of his self-custodial wallet in May 2022, prompting speculation that Ethereum would dump later. However, it turned out that the transferred funds were set aside for charitable donations.

Whale Transaction Unlocks XRP From Escrow

Rounding up the top five is the transfer of 500,000,000 XRP ($204 million) from an escrow wallet to an unknown address on Dec. 1, 2022. The escrow is essentially a smart contract on the XRP Ledger, written to dispense locked tokens once certain external conditions are met.

In 2018, Ripple launched an initiative to release 1,000,000,000 XRP at the start of each month through an escrow to create a predictable supply of its native coin. 

Accordingly, the transfer of 500,000,000 XRP was followed by transfers of 400 million and 100 million coins to unlock 1,000,000,000 XRP for Dec. 2022. In the past, Ripple has kept 800,000,000 coins, choosing to lock up the remaining 200,000,000 XRP for a new release.

Summary of the Top 5 Whale Transactions

The top five transactions for the week were:

5. 200,000,000 BUSD ($200,080,000) was transferred from Binance to an unknown wallet on Nov. 30, 2022, followed by a transfer of the same amount of BUSD from an unknown wallet to Binance.

Tx costs: $3.31 and $1.27

4 – 500,000,000 XRP ($204,402,898) was unlocked from escrow at an unknown wallet on Dec. 1, 2022.

Tx cost: Not available

3 – 231,736 ETH ($271,829,771) was transferred from an unknown wallet to another unknown wallet on Nov. 28, 2022.

Tx cost: $1.32 

2 – 231,782 ETH ($274,046,462) was transferred from one unknown wallet to another on Nov. 28, 2022.

Tx cost: $2.51

1 – 127,351 BTC ($2,062,504,721) was transferred from Binance to an unknown wallet, likely another new Binance address, on Nov. 28, 2022.

Tx cost: $0.42

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Bybit announces second round of layoffs in 2022 to survive bear market

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Bybit announces second round of layoffs in 2022 to survive bear market

Ben Zhou, the co-founder and CEO of Bybit, announced a reorganization plan amid a prolonged bear market, which involves a steep reduction in the workforce.

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Bybit announces second round of layoffs in 2022 to survive bear market

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Yes, the bear market weeds out the bad actor, but it also forces the existing players to rethink their business strategies to offset resultant losses. In this effort, crypto exchange Bybit announced mass layoffs for the second time in 2022.

Ben Zhou, the co-founder and CEO of Bybit, announced a reorganization plan amid a prolonged bear market, which involves a steep reduction in the workforce. The “planned downsizing” will affects employees across the board:

“We are all saddened by the fact this reorganization will impact many of our dear Bybuddies and some of our oldest friends.”

Independent reporter Colin Wu highlighted that the layoff ratio is 30%. On June 20, Bybit silently laid off employees, citing unsustainable growth, which was confirmed via leaked internal documents. Bybit’s employee headcount grew from a few hundred to over 2000 in 2 years.

1) Difficult decision made today, but tough times demand tough decisions. I have just announced plans to reduce our workforce as part of an ongoing re-organisation of the business as we move to refocus our efforts for the deepening bear market.

— Ben Zhou (@benbybit) December 4, 2022

While announcing the incoming downsizing, Zhou shared his intent to make the offboarding process as smooth as possible. Sufficing this need for restructuring, Zhou said:

“It’s important to ensure Bybit has the right structure and resources in place to navigate the market slowdown and is nimble enough to seize the many opportunities ahead.”

For affected Bybit employees, the revelation is a hard pill to swallow, but Wu reported that employees would receive three months of salary as compensation.

Related: Bybit releases reserve wallet addresses amid calls for transparency

On Nov. 24, Bybit launched a $100 million support fund to provide liquidity to institutional traders following the FTX collapse.

The fund was made available to eligible market makers and high-frequency trading institutions and distributed at a 0% interest rate.

The maximum amount distributed per applicant was $10 million under the condition that the funds would be used for spot and Tether (USDT) perpetual trading on Bybit.

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Elon Musk alleges SBF donated over $1B to Democrats: “Where did it go?”

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Elon Musk alleges SBF donated over $1B to Democrats: “Where did it go?”

SBF made the “highest ROI trade of all time” by donating $40 million to the right people for getting away with stealing over $10 billion, said Will Manidis, the CEO of ScienceIO.

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Elon Musk alleges SBF donated over B to Democrats: "Where did it go?"

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The attempts of mainstream media to water down the frauds committed by FTX CEO Sam Bankman-Fried (SBF) did not fare well in convincing the crypto community and entrepreneurs. Instead, the misinformation campaign collided with Tesla CEO Elon Musk’s drive to position Twitter as “the most accurate source of information.”

The world is yet to overcome the shock after witnessing the legal leniency awarded to SBF for misappropriating users’ funds and shady investment practices via trading firms Alameda Research and FTX. Will Manidis, the CEO of ScienceIO, a healthcare data platform, pointed out that SBF made the “highest ROI trade of all time” by donating $40 million to the right people for getting away with stealing over $10 billion.

That’s just the publicly disclosed number. His actual support of Dem elections is probably over $1B. The money went somewhere, so where did it go?

— Elon Musk (@elonmusk) December 3, 2022

On the other hand, Musk alleged that SBF donated over $1 billion to Democratic candidates, which is way more than the publicly disclosed amount of $40 million. SBF previously admitted to making backdoor donations to the Democratic Party. Musk asked:

“His actual support of Dem elections is probably over $1B. The money went somewhere, so where did it go?”

The United States House Financial Services Committee chair Maxine Waters, a Democrat, and ranking member Patrick McHenry, a Republican, have requested SBF to appear in an investigative hearing scheduled for Dec. 13.

.@SBF_FTX, we appreciate that you’ve been candid in your discussions about what happened at #FTX. Your willingness to talk to the public will help the company’s customers, investors, and others. To that end, we would welcome your participation in our hearing on the 13th.

— Maxine Waters (@RepMaxineWaters) December 2, 2022

To this request, prominent entrepreneurs, including Polygon CEO Ryan Wyatt, informed Waters that “he’s (SBF) a criminal” after being shocked at the leniency shown by the people in power to the fugitive.

Related: FTX collapse drives curiosity around Sam Bankman-Fried, Google data shows

The crypto community openly criticizes paid narratives that try to show SBF in good light. The latest backlash is related to SBF’s interviews in New York Times DealBook Summit and Good Morning America interviews.

Speaking to the news outlets during the ‘apology tour,’ SBF portrayed himself as a victim and got applauded at the end. “Watching SBF’s interview is kind of like watching Casey Anthony’s documentary. They’re so mechanical, they’re so inauthentic in their delivery. If you feel any emotion, at all, it slows people down. The way it is expressed is a separate subjective matter,” said Twitter user and developer Naom.

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