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ETH Gas Fee Soars to 222 Gwei as Binance Consolidates ETH Wallets

source-logo  coinedition.com 10 December 2022 13:44, UTC

Data from Ultrasound.Money, an analytic firm tracking the Ethereum (ETH) blockchain activities, shows that the ETH gas fee has soared to 222 Gwei in the last 24 hours. Collin Wu media believe the unprecedented increase happened as the largest crypto exchange, Binance, began its proof-of-reserve checks for Ethereum tokens.

It added that Binance consolidated ETH tokens from multiple addresses to its hot wallet labelled Binance14 for its next POR verification stage, pushing the network’s gas fee high.

The Ethereum Gas fee once soared to 222 Gwei, as binance consolidated funds from countless deposit addresses to the Binance14 hot wallet in preparation for the next stage of POR check. Binance has completed its BTC reserve and is starting an ETH check. https://t.co/Tan4AEjNMn pic.twitter.com/ylgUZ40pYa

— Wu Blockchain (@WuBlockchain) December 10, 2022

Notably, Gwei is a denomination of the Ethereum token, ETH, used for paying transaction fees, equivalent to one-billionth of one ETH.

Furthermore, during Binance’s proof-of-reserve audit on Bitcoin last month, the exchange moved over $2 billion wallet worth of BTC to a newly created wallet. The action sparked multiple speculations, with crypto enthusiasts suggesting a possible bank run.

However, the CEO of Binance, Changpeng Zhao, later affirmed that the transaction was part of the audit process, urging the community to ignore the FUD.

This is part of the Proof-of-Reserve Audit. The auditor require us to send a specific amount to ourselves to show we control the wallet. And the rest goes to a Change Address, which is a new address. In this case, the Input tx is big, and so is the Change. Ignore FUD! https://t.co/36wUPphIZk pic.twitter.com/2NkH5L5J9j

— CZ 🔶 Binance (@cz_binance) November 28, 2022

Notably, Binance implemented its proof-of-reserves system after the collapse of FTX last month, which exposed the fact that FTX did not have the crypto on its books to cover an influx of customer withdrawal requests. Last Wednesday, Mazars, a global audit, tax, and advisory firm, confirmed that Binance has a 101% collateralization ratio on 575,742 Bitcoin (BTC) net customer deposits as of November 22, 2022. The data matched the one given by Binance in its first proof of reserves report from last month.