Withdrawal 1

I performed a withdrawal of 29000 GVT from Binance. Based on their wallet balance, this was going to severely drain their hot wallet, but I needed to get my coins off of the exchange anyway and was within my rights to do so.

I had waited over 6 hours for Binance to process my withdrawal, but nothing was happening. Were they going to shuffle their hot wallets around or would they touch their cold wallet?

Eventually my withdrawal was processed and their primary hot wallet was left with around 2900 GVT. A few hours after my withdrawal something unexpected happened. A swarm of deposits started flowing into Binance. Hundreds upon hundreds of transactions were flowing in at a mindboggling rate over the course of hours. Most of these transactions ranged between 8 and 70 GVT. All of this can be verified on the blockchain in the Binance Main Hot Wallet from March 13th.

Before I made my withdrawal there were around 8000 wallets that held GVT. After this there were less than 7000 wallets. Over 1000 deposits from varying addresses consecutively flowed into Binance in order to refill their hot wallet.

But this threw a wrench in my hypothesis. If Binance had this “wallet swarm” ready to refill their hot wallet when needed, then perhaps that cold wallet wasn’t theirs…

Withdrawal 2

The next day, I withdrew 31250 GVT. Soon after the withdrawal, the wallet began to refill again. This time a few hundred wallets were depositing between 7 and 10 GVT. It was strange but still interesting. After checking the number individual wallets holding GVT, I saw that it was down to 6630 and of those, only 6004 held an amount over 1 GVT. I also noticed that the number of “swarm wallets” was nearly depleted. Only a few remained and I was left wondering what would happen next.

Withdrawal 3

This was the last of my stash. I withdrew over 35,000 GVT to finally secure my coins and see what would happen when the smaller accounts were completely drained. My suspicion was proven correct.

With the swarm apparently depleted, Binance was forced to access their Cold Wallet for the first time in 42 days in order replenish their GVT reserves from the Secondary Cold Wallet in question. Over 550,000 GVT were moved from that wallet to their hot wallet, giving them more than enough GVT to fulfill my withdrawal request. The key here is that they moved the coins BEFORE they fulfilled my withdraw request. The timing was perfect. They saw my request, manually accessed their cold wallet and then processed my request. Previously they only used the swarm to refill their hot wallet after the request was completed. After that, they moved over 360,000 GVT from their primary hot wallet into their primary cold wallet (the one with billions of dollars in tokens). Overall, I was pleasantly surprised that things turned out the way they did. Part of me thought that they were simply going to refill from more swarm wallets that I may have been unaware of.