PANews reported on January 24 that Binance admitted that it mistakenly placed the collateral of some of its issued tokens in the same wallet as the exchange's customer funds, according to Bloomberg. Data published by Binance on its website on Monday showed that nearly half of the reserves of the 94 currencies issued by Binance (called Binance-peg tokens or "B-Tokens") are currently stored in a wallet called "Binance 8", which also holds customer assets. According to Binance data calculated on January 20, Binance issued a total of more than $539 million in 41 B-Tokens with Binance 8 as a collateral wallet, while the wallet itself held more than $1.8 billion in related assets. Overall, according to data from crypto intelligence platform Arkham, Binance 8 contains more than $16.5 billion in various crypto tokens, not tokens related to B-Tokens. This means that the wallet contains far more token reserves than the number required for B-Tokens issued by Binance. This suggests that the collateral is mixed with the customer's tokens, rather than stored separately as it says.

A Binance spokesperson said: "Binance 8 is an exchange cold wallet. The pledged assets were previously mistakenly moved to this wallet and referenced accordingly on the B-Token pledge proof page. Binance is aware of this error and is moving these assets to a dedicated pledge wallet." The spokesperson added that despite Binance's so-called "historical operational errors," all user assets held by the exchange "have always been and will continue to be backed 1:1." Binance did not specify when the problem was discovered.

Blockchain analysis company ChainArgos first discovered the problem on January 17. Jonathan Reiter, co-founder of ChainArgos, said that the excessive overcollateralization of some B-Tokens and Binance's use of the Binance 8 wallet showed that "customer funds and B-Token assets are clearly mixed." Earlier on January 11, Bloomberg reported that Binance admitted that BUSD had reserve management defects, saying that it was caused by "operational delays" but had been resolved.