Introduction

What is the story behind proof of reserves?

After FTX’s stunning meltdown, many are calling for exchanges to prove they have enough assets in reserve to offset any outstanding liabilities. as answer to these Calls some exchanges (not All of them) shared their cold + hot wallet addresses or at least take some actions to prove that they have enough assets.

here we will take a deep look on Ethereum Addresses of Biannce, Kucoin and Crypto.com To see what is hidden under these addresses and what activities they had

Method

contracts and summary on how I collected the data:

wallet addresses:

• Binance Addresses: link
• Kucoin Addresses: link
• Crypto.com: link

summary

With help of above addresses and help of Ethereum tables on flipside we can monitor most of the activity and transferees of those wallets. I must note that our daily analyzes are only included the last 14 days (2 weeks) and we excluded the inner transfers (such as from Binance Wallet #1 to #4). all the Volume numbers are here in USD.

I Excluded outlier data that happen because some scam tokens as much as was possible

our approach for answering the bounty questions:

we will 3 Main metric:

1. Balance:

   We put the balance of the wallets based on the tokens and each address in order to understand which tokens they have the most in their wallets and which wallet has the largest share of the balance.

2. token transferring (inflow/outflow/netflow):

   We check the entry and exit of capital into these wallets, of course we must mention all this is breakdown by token. to find out which token had the highest share of the flow

3. Infractions :

   how many distinct addresses interacted with the wallets? and when I say interaction I mean deposit or withdraw tokens.

Binance

Kucoin

Crypto.com

Observation

• BUSD with almost 21B USD is the largest holding of binance
• highest balance belongs to the wallet with 0xa344c7ada83113b3b56941f6e85bf2eb425949f3 address with 20.54B USD
• in the last month the outflow was 864M USD higher than Inflow
• in the recent days we can see big amount of stable coins exit the wallets and the netflow shows us that the outflow was bigger on those days
• the daily average of inflow amounts range between 42.69K USD (lowest average on Nov 14) and 149.9K USD (highest on Nov 10)
• the daily average of outflow amounts range between 14.67K USD (lowest average on Nov 5) and 48.03K USD (highest on Nov 10)
• from those daily averages number we can say that inflows amounts are usually higher than outflow ones
• until now 11.31M addresses interacted with Binance wallets which the highest daily of interaction was on Nov 9 with 90.41K addresses
• 0x3f5ce5fbfe3e9af3971dd833d26ba9b5c936f0be address had the highest deposit amount to Binance wallets with more than 43.3B USD

Observation

• USDT with almost 592M USD is the largest holding of Kucoin
• highest balance belongs to the wallet with 0xd6216fc19db775df9774a6e33526131da7d19a2caddress with 1.7B USD almost 81% of the Total balance
• in the last month the outflow higher than Inflow by 834M USD (the netflow is almost same as binance)
• at all the days the outflow was higher than inflow and shows us negative netflow
• USDT is had the highest share in netflow volume
• on Nov 5 we saw the highest negative netflow with higher than 300M USD volume which most of them was USDT
• the daily average of inflow amounts range between 3.7K USD (lowest average on Nov 13) and 9.8K USD (highest on Nov 8)
• the daily average of outflow amounts range between 3.6K USD (lowest average on Nov 13) and 65K USD (highest on Nov 5)
• the highest outflow amount average was on the day that we saw the highest amount of outflow , so we can say that most of the outflows amount on that day had a big size
• until now 2.36M addresses interacted with Kucoin wallets which the highest daily of interaction was on Nov 10 with 25.54K addresses
• 0xd6216fc19db775df9774a6e33526131da7d19a2caddress had the highest deposit amount to Kucoin wallets with more than 12.6B USD

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Observation

• SHIB with almost 505M USD is the largest holding of Crypto.com
• highest balance belongs to the wallet with 0x72a53cdbbcc1b9efa39c834a540550e23463aacbaddress with 2.45B USD almost 51% of the Total balance
• in the last month inflow was higher than outflow by 156M USD
• the highest netflow was positive and more than 150M USD on Nov 15 and most of it was USDC token
• unlike Kucoin there were no big outflows here
• the daily average of inflow amounts range between 5.8K USD (lowest average on Nov 6) and 195K USD (highest on Nov 15)
• daily average inflow amount on crypto.com was usually higher than 50K USD, from this we can conclude that the inflow amount that went to it are in big size
• the daily average of outflow amounts range between 1.75K USD (lowest average on Nov 6) and 9.92K USD (highest on Nov 11)
• until now 1.07M addresses interacted with Crypto.com wallets which the highest daily of interaction was on Nov 10 with 1.5K addresses
• 0x32d4703e5834f1b474b17dfdb0ac32cc22575145address had the highest deposit amount to Crypto.com wallets with more than 7.97B USD

Conclusion

1. largest holding:

   a. Binance: BUSD with 21B USD

   b. Kucoin: USDT with 592M USD

   c. Crypto.com: SHIB with 505M USD

2. Considering the difference in balances, Kocoin has the largest outflow

3. the netflow amount of Binance and Kocoin in the last month are almost same and unlike Crypto.com they were negative

4. the average inflow amount of crypto.com is even higher than binance at many days

5. Binance had almost 10 Times higher interactions from distinct addresses than Crypto.com

Thanks For your time

Discord and Twitter: Abbas_ra21

date: 2022-11-19