Binance, the world’s largest crypto exchange, may have been responsible for a significant spike in Ethereum’s daily active users on two separate occasions this month. An investigation conducted by Scope Protocol indicated that the crypto giant may have caused the spikes by taking back Ether from users’ deposit addresses.
Scope Protocol took to X (formerly Twitter) earlier today to share the findings of its investigation:
ETH active addresses spiked to a record 1M+ earlier this month.
— 0xScope (🪬 . 🪬) (@ScopeProtocol) September 22, 2023
At the same time, @binance possibly got back $ETH allocated for network fees from inactive addresses.
Read this report to learn how that happened.
🔗https://t.co/6yltQKVs5m#Web3 #0xScope
According to Scope Protocol, the Ethereum blockchain recorded 1.002 million active entities and 1.029 active addresses on September 13, 2023. This metric exceeded the average number of daily active addresses and entities for Ethereum, which was approximately 300,000. Additionally, this was also the second-largest active address/entity number on the Ethereum blockchain.
On December 9, 2022, the Ethereum blockchain recorded 1.42 million active addresses. Given that the metrics of September 13 were close to the ATH, Scope Protocol investigated and found that the Binance 14 hot wallet received 703,174 transfers from 702,083 unique addresses. These transfers likely contributed to the spike witnessed in Ethereum’s daily active users on that day.
The Scope Protocol team also found that the majority of the above-mentioned transactions involved transfers of small amounts of ETH back to the Binance hot wallet. Additionally, the wallets involved in the transfers had mostly been inactive.
Speaking on the findings of the investigation, Scope Protocol stated:
We have come to the conclusion that Binance is likely retrieving the remaining $ETH amounts that it previously allocated for users’ accounts. The total value of these transfers amounted to 90,108.20 $ETH ($146.07M).
A second spike was witnessed on September 21, 2023, when the daily active entities and addresses surged to 434,112 and 462,107, respectively. Around the same time, the Binance 14 hot wallet received 149,373 transfers from 148,317 unique addresses. As per Scope Protocol, Binance was consolidating the ETH that was previously allocated for users’ accounts.
