A shocking on-chain investigation report was released at the end of the year, exposing a reserve crisis at a major exchange—out of the $1.78 billion stored by users, up to 88% has been diverted into high-risk activities such as lending and protocol filling. This is not just a simple risk management issue; it’s a case of funds being used as a "cash machine."

The data is alarming. Of the USDT reserves, $1.44 billion (81%) has been lent to lending platforms, $96 million flows into proprietary ecosystem protocols, and $18 million into derivatives products—meaning the actually available reserves are only $234 million, accounting for 12.6%. This implies that the USD assets in your account are actually engaged in high-risk investments.

The situation with ETH is even worse. Reserves have dropped from 392,000 ETH in May to 118,000 ETH, a 70% direct evaporation. Of the remaining amount, only 8% of the native ETH can be withdrawn at any time; the rest has been staked or lent out—account balances look good, but attempting to withdraw will be a shock.

What’s most suffocating is the subsequent response. Hackers have made three successful attacks within half a year, each time smoothly transferring out funds. During the latest withdrawal wave, $256 million was redeemed by users within 15 days, and the platform started to freeze withdrawals. When opening the withdrawal interface, many users’ requests show "Processing" for hours—once trust is broken, liquidity issues at exchanges are no longer just technical problems.

This incident has taught everyone a lesson: looking at the exchange’s reputation alone is useless. True security depends on whether the reserves in cold wallets are really there.