Binance is encouraging withdrawing/minting your crypto into tokens on Binance chains, without confirming they hold the underlying asset. They fail to provide Proof of Assets for at least 51 of the crypto assets available to withdrawal to BEP2/20 and those they do, it’s often inadequate reserves.


TLDR: Binance is encouraging users to withdraw their crypto into the Binance ecosystem by charging higher fees to withdraw into the native ecosystem – and are failing to Provide Proof of Assets or a sufficient amount in their Proof of Assets for your crypto in the Binance ecosystem. This gives Binance a huge opportunity to manipulate the crypto market by creating “fake crypto tokens” that are not backed by any underlying asset and then selling/using your assets. Furthermore it creates artificial volume by encouraging withdraws into the BNB ecosystem that may not be backed by any assets…. but really you should read the entire thing.

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What you need to know

BNB Beacon Chain (BEP2 tokens) and BNB Smart Chain (BEP20 tokens) are two native chains of the Binance ecosystem. Binance allows users to withdraw lots of different crypto as tokens into their native chains which then allows users the ability to use “those assets” in the Binance ecosystem. As you can imagine, this could create a few concerns… The largest being Binance could sell/send the underlying asset of the BEP2/20 Tokens as the user no longer holds the true crypto but a token on the Binance ecosystem, essentially allowing them to manipulate the supply of those cryptos by creating “fake crypto tokens”. For example there is approximately 3.4B Dogecoin in the Binance ecosystem that do not have any proof of reserves (1.8B Dogecoin $141M stored as BEP20 tokens) (1.6B Dogecoin $123.6M stored as BEP2 tokens). Binance could have sold the underlying asset or used those as reserves of the actual asset – which would artificially increase the total supply of the asset.. To ease concerns about artificial manipulation Binance began providing Proof of Asset wallets where, for crosschain assets (Ether, XRP, ADA, Doge, etc..) they theoretically hold an underlying asset equal to the amount of the asset that is in the BEP2/20 ecosystem. This is supposed to ensure the Binance asset you are holding is backed by an equal amount on its native chain and the supply is not being artificially manipulated. The problem however is they do not provide a Proof of Asset list for most of their assets in the Binance ecosystem. Additionally of those that have a Proof of Asset wallet most are not fully backed. Ether for example is listed as backed by 1.04M in reserves however there are over 1.4M Ether in BEP2/BEP20 tokens. Meaning a fair portion of the crypto stored as BEP2/20 tokens may not be backed whatsoever.


The following table is a list of cross-chain assets in the top 30 crypto projects by marketcap – available on the BEP2/20 ecosystem that do not have any Proof of Assets wallet linked.

submitted by /u/GabeSter
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