Binance, one of the world’s largest cryptocurrency exchanges, is making headlines again today. This time there is a development regarding gas prices. This is news from a wallet connected to Binance. It was surprisingly revealed that he spent over $1 million in gas fees in a single day. The incident raises concerns about the exchange’s technical capabilities and ability to handle large amounts of digital assets across multiple blockchain networks.
Venture capital firm sounds the alarm
The news was first brought to public attention by Adam Cochran, a partner at venture capital firm Cinneamhain Ventures. Cochran took to Twitter to highlight the astronomical gas spending by Binance. Ethereum network transaction fees were as low as 6 gwei (equivalent to $0.17) per transaction. From there it rose sharply to a high of 332 gwei ($11.2).
This sudden increase in gas prices attracted attention. It was directly linked to activity associated with a Binance-owned wallet identified as “Binance 14.” According to data from Dune Analytics, Binance 14 consumed a staggering 362 ETH on September 21. This was also accompanied by 94,000 transfers. When we look at Kriptokoin.com, this is a figure well above typical activity levels.
Questioning the technology and reliability of the Binance exchange
Adam Cochran did not mince words when assessing the situation. Accordingly, he described Binance’s technology as “garbage”. He went further to question the credibility of an exchange that claims to provide merkle tree evidence to ensure accurate accounting and boasts of secure storage of hundreds of billions of dollars in various cryptocurrencies.
Crypto investor Belinda Zhou shed light on the issue and made statements. Accordingly, he explained that the mishap was caused by engineers from Binance’s wallet team misconfiguring the gas allowance and setting it too high. It is also possible that Binance will publish a detailed case report in the near future. On the other hand, it is within expectations for the responsible party within the team to explain the possible repercussions.
Binance’s statement
Yi He, co-founder of Binance Coin, explained that the high gas fees occurred during a wallet scavenging operation performed during periods when gas fees were low. The aim was to facilitate users’ withdrawals and increase the security of funds. Coincidentally, Binance CEO Changpeng Zhao had issued a warning to users about decentralized exchanges the day before. This warning followed news of an attack on Balancer, a decentralized finance protocol.
The eye-popping gas fee incident involving Binance’s wallet is attracting attention. On the other hand, it sparks a debate about the exchange’s technical proficiency and capacity to handle large cryptocurrency assets. Accordingly, Binance is preparing to investigate the issue and announce its findings. On the other hand, the cryptocurrency community is watching the incident closely. It also emphasizes the importance of meticulous configuration and security measures in the crypto world.
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