Cryptocurrency exchange Binance does not use staking Dogecoin (DOGE) and Litecoin (LTC) for third party lending or other profit-oriented purposes. The company reported this to CoinDesk.

“LTC and DOGE are not used for on-chain staking as they are blockchain-based tokens with algorithms other than Proof-of-Stake. “User funds remain with Binance and we take a very strict risk management approach to ensure their safety.”

The company representative also noted that the platform does not use these assets in loan transactions, but pays deposit interest from its own treasury.

On July 19, Binance launched its Locked Staking program for tokens based on the Proof-of-Work (PoW) consensus algorithm, which provides annual rewards of up to 3.1% for DOGE and 7% for LTC.

Since staking on the Dogecoin and Litecoin networks is not technically possible, some users felt that the exchange could use client funds in high-risk strategies to pay deposit interest, as Celsius Network did.

Some also pointed out that the high yield on deposits poses a particular threat to the stability of the platform, which could potentially lead to customers losing funds.

oh boy, can’t wait for 20% returns through purely sustainable magic!

– Shibetoshi Nakamoto (@BillyM2k) 19 July 2022

Binance’s new program provides a 120-day asset freeze. Clients can use positions early, but will not receive a reward in this case.

Recall that the US Securities and Exchange Commission denied information about the investigation into the BNB token.

Read ForkLog bitcoin news in our Telegram – cryptocurrency news, courses and analysis.