Could The Exchange Become The Next FTX?

Could The Exchange Become The Next FTX?

Centralized crypto exchanges have been thrown into the spotlight in the wake of the FTX fallout. is one of those currently facing scrutiny from analysts and crypto sleuths.

Hong Kong-based is in the hot seat as blockchain sleuths and on-chain analysts dig into its past and present. The exchange has also made some questionable transactions as of late, which have raised red flags.

On Nov. 15, Lookonchain posted some revealing data on the exchange. The issue arose with the hacking of in April 2018, resulting in a loss of $230 million.

Apparently, one of the first moves the exchange made was to try to cover this up. Crypto sleuth ‘ZachXBT’ highlighted this in response to founder Lin Han on Nov. 15:

Looking Into

Lookonchain delved into the reserves that holds to discover even more discrepancies.

It analyzed the exchange’s four wallets on Ethereum and found that only has $479 million in reserve assets.

There were 71 million of its native GT token worth $259 million and 3.1 trillion SHIB tokens worth $29 million. These two questionable assets made up more than 60% of the total reserves on Furthermore, only 21% of its assets were held in Ethereum and Tether (USDT).

A couple of spurious transactions were also highlighted. On Oct. 21, received 320,000 ETH worth just over $400 million from The exchange transferred a total of 284,975 ETH worth $359 million back to between Oct. 25 and Oct. 30.

Apparently, this was a mistaken transfer, but there was no mention of the outstanding 35,025 ETH. Lookonchain observed:

“Coincidentally, the time when the 320K ETH transfer occurred was so close to the time when released the Proof of Reserve Evaluation Report.”

On Nov. 13, Binance boss Changpeng Zhao warned:

“If an exchange has to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems. Stay away.”

Digging Deeper

Furthermore, claims to have been audited by Armanino, the same company that audited FTX. However, it was titled an “Agreed-Upon Procedures Report,” not a full reserves audit.

On Nov. 15, Lin Han tweeted that the proof-of-reserves in audited Ethereum was 269,035 ETH.

However, centralized exchange users are understandably jittery with the industry currently on thin ice.

CoinGecko reports that the exchange has a 24-hour volume of $928 million. This ranks it as the eleventh largest in terms of trade volume. Its GT token price has lost 15% over the past week and was trading at $3.70 at the time of press.


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