A report from auditing firm Majors revealed that Binance’s bitcoin reserves have a 101% collateralization ratio, suggesting that the exchange has more than all the BTC it needs to cover customer deposits.
In a recent report, Mazar Claimed The world’s largest cryptocurrency exchange has a 101% collateralization ratio on 575,742 BTC in net customer deposits as of midnight UTC on Nov. 22.
“At the time of the assessment, Mazar observed Binance controlled in-scope assets in excess of 100% of its total platform liabilities,” said the report, which provides proof-of-reserves and proof-of-liability verification of Binance. ”
Specifically, the collateralization report matches this figure provided In its first Proof of Reserves report by Binance at the end of last month. And before that, Binance had revealed Right after FTX’s bankruptcy some initial details about its reserves started to spread panic in the crypto community.
Mazars wrote that they conducted an agreed-upon process (“AUP”) engagement, which is meant to “perform the processes that have been agreed upon with Binance, and are reporting the findings.”
They stated that they make no claims regarding the suitability of the AUP, and that “the AUP contract is not an assurance contract. Accordingly, we do not express an opinion or assurance conclusion. If we had performed additional procedures, other matters could have come to our notice and been reported.”
A Proof of Reserves (PoR) is an independent investigation conducted by a third party on centralized crypto exchanges. The goal is to ensure that those platforms hold the assets they claim on behalf of their clients.
Binance CEO CZ Was One of the First Crypto Executives help The idea of sharing proof-of-reserve to increase transparency. He said on November 9, “All crypto exchanges should do Merkle-tree proof-of-reserves. Banks run on fractional reserves. Crypto exchanges shouldn’t.”
However, the last few weeks have seen a spurt in the PoR process. according to statistics accumulated Nick Carter, a partner at Castle Island Ventures and co-founder of blockchain data aggregator Coinmetrics.io, said five exchanges, including Kraken, BitMEX, Coinfloor, Gate.io and HBTC, have completed their proof-of-reserve audits.
It is worth noting that some industry veterans have argued that proof of reserves alone is not sufficient. This is because this practice does not reveal the overall balance sheet and liabilities of the platform, making it difficult for users to thoroughly verify a company’s financial position.
“Proof of reserves is a good start, but to be useful it needs to be combined with proof of liabilities,” Told Emin Gunn Sirer, CEO of Ava Labs. In other words, crypto platforms can only borrow money for the short term to meet their PoR.
Bitcoin Crypto Related Post