FalconX had a “reconciliation anomaly” involving 1.35 million SOL tokens until Binance asked for their return

PANews reported on October 8 that according to CoinDesk, a brokerage firm has several key responsibilities, one of which is to hold assets for clients and ensure accurate tracking and recording of the ownership of these assets. However, in the field of cryptocurrency, a prime broker called FalconX has neglected this responsibility. It is reported that since 2021, the 1.35 million Solana (SOL) tokens held by FalconX (currently worth about US$190 million) have not been properly managed and tracked for many years. Recently, this loophole was discovered by Binance, a key liquidity partner of FalconX. Binance claims to be the legal owner of these SOL tokens and asked FalconX to return them. At present, the specific reasons why FalconX failed to effectively track these cryptocurrencies are unclear, and it is also puzzling why Binance has failed to discover and track the funds for many years. This incident has triggered widespread doubts in the industry about the accounting systems and internal control mechanisms of brokerage firms.

FalconX confirmed that there was a "reconciliation anomaly" involving Solana tokens. According to a FalconX spokesperson, the company reconciled accounts with all exchanges, customers and partners, but no one showed a record of the transaction. Binance said its customers were never at risk of losing funds due to this incident, and if the 1.35 million tokens were never found, Binance would have borne the loss itself.

To profit from the assets they’re responsible for holding, prime brokers like FalconX typically put the assets to work, either as collateral or for loans or arbitrage opportunities. But a FalconX spokesperson said that wasn’t the case in this case, as the assets were in custodial custody. Shortly after CoinDesk raised questions about the lost and then recovered Solana tokens, the two companies responded in a joint statement saying the assets in question had been returned to Binance and the matter is now fully resolved. “Binance and FalconX will continue to operate as usual,” the companies said in an email.