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

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To counter growing mistrust among crypto investors in the wake of FTX’s collapse, crypto exchanges have unanimously decided to share proof of reserve with the public to show their legitimacy. However, some anomalies found during on-chain investigations suggest foul play and market manipulation.

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

Gate.io released a snapshot of the asset on October 28. Source: Colin Wu

On October 28, Gate.io released its Proof of Reserves snapshot, which Solidity developer Shegen claims was made using Crypto.com funds, and questioned:

“It was a supplement for the evidence. Gate and crypto.com are screwed? »

Moreover, the crypto community suspects Huobi of attempting a similar manipulation. A wallet address related on the Huobi exchange was found transferring 10,000 ETH to Binance and OKX custodial wallets shortly after his asset snapshot was released.

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

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Huobi Wallet Information. Source: Etherscan

While Huobi has yet to publicly hit back at the crypto community’s claims, Gate.io founder Lin Han has revealed his side of the story. Han argued that the snapshot in question was taken on October 19, two days before Crypto.com accidentally transferred funds of 320,000 ETH.

Han further reiterated that the funds from Crypto.com came after the relevant snapshot and shared were posted. evidence for the satisfaction of the community.

The possibility of multiple crypto exchanges working together to manipulate investor funds has kept the community on guard until an official statement. Huobi has yet to respond to Cointelegraph’s request for comment.

Related: Binance Shares Wallet Addresses and Activity After Proof of Reserve Commitment

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

“Our goal is to enable users of our platform to be aware and make informed decisions that align with their financial goals,” Binance said while revealing the wallet addresses.