Binance admits reserve tokens were mistakenly co-mingled with user funds, making ability to redeem coins difficult to verify

Binance admitted to accidentally mixing client funds with reserve tokens in a cold wallet, according to Bloomberg.  Reserves for nearly half of the Binance-peg tokens, or

"B-Tokens," were stored in a wallet that also held customer assets. Binance has maintained that its client assets were backed by enough collateral to meet any redemption requests.

Crypto exchange Binance admitted to mistakenly mixing client funds with reserve cryptos in a cold wallet, according to a report from Bloomberg.  Reserves for roughly half

of Binance's 94 self-issued "B tokens" are stored in a wallet named "Binance 8," which also maintains client funds, the report said. Mixing client funds with collateral

tokens goes against Binance's own guidelines as listed on the company's website.  Binance did not immediately respond to Insider's request for comment. A spokesperson for

Binance told Bloomberg the funds were mixed in error. "Binance is aware of this mistake and is in the process of transferring these assets to dedicated collateral wallets,"

the world's largest crypto exchange told Bloomberg.  The B-Tokens are meant to be backed one-to-one in locked reserves by the cryptos they're based off of, and the

collateral should be stored separately from client funds. Roughly 40 B-Tokens are listed on Binance's website as being stored in the Binance 8 wallet.  The mixing of the

collateral tokens with client funds makes it difficult to verify the amount of B-Tokens available for client redemption requests. Binance has maintained that its client assets

were backed by enough collateral to meet any redemptions.