Binance mistakenly mixed its own cryptocurrency with users' cryptocurrency

Binance, the world’s largest crypto exchange, has reported a security breach involving customer funds stored on the exchange. According to Bloomberg, 94 tokens, known as Binance-peg or B-tokens, are stored in the Binance 8 wallet, which also contains customers' digital assets.

According to Bloomberg, Binance mistakenly stored some of its Binance-peg Token in the same wallet «Binance 8» as customer funds. Binance said that it is aware of this mistake and is in the process of transferring these assets to collateral wallets. https://t.co/TtjcGdvU62

— Wu Blockchain (@WuBlockchain) January 24, 2023

Experts say that thousands of customers may be affected by Binance’s mistake and suffer losses of more than $ 539 million. «Binance 8 is an exchange cold wallet. The collateral assets were previously transferred to it by mistake and are indicated accordingly on the B-Token Proof of Collateral page,» a Binance representative said.

According to the exchange’s specialists, Binance is in the process of fixing the problem. All users' cryptocurrencies stored on the exchange continue to be supported 1:1, Binance emphasized.

In addition to the problem with the storage of client funds, the exchange faced accusations of helping the Russian exchange Bitzlato. According to blockchain transaction data accessed by the media, Binance was a counterparty to the Bitzlato platform, whose founders were arrested. 46% of digital assets that passed through Bitzlato are related to criminal activity. As FinCEN representatives found out, Binance laundered about $ 346 million in BTC received by Bitzlato illegally. Currently, Binance representatives are actively assisting law enforcement agencies in the Bitzlato investigation.