Investors have been very worried lately after the bankruptcy of the cryptocurrency exchange FTX and the huge fluctuation in the markets. Binance, the world’s largest cryptocurrency exchange, called for transparency to all exchanges after the events. In this context, the giant company has also openly shared its current assets and wallet addresses in the past weeks.
Wanting to maintain the confidence of its investors, Binance also announced that it would implement the Proof of Reserves system. The giant stock market has now kept its promise of transparency and introduced its system that will include only Bitcoin reserves at first, and other tokens and networks in the following weeks.
What is this proof of reserve?
In his post on Binance’s official website, he explained both Bitcoin reserves and what his new system is. According to the briefing, the proof-of-reserve system shows the assets the company holds for users. This proves that Binance has funds covering all user assets and some reserves.
The company adds that while Binance’s reserves increase by at least one Bitcoin to ensure customer funds are backed when a user deposits one Bitcoin, this does not include Binance’s institutional assets, which are held in a completely segregated place. It is also among the statements made that Binance also has an emergency fund for extraordinary situations.
Binance has shown us that it can make large withdrawals by sharing the assets it holds in its statement in the past weeks. However, it was not shared how much of these assets belong to the company and how much to users. The company clarified the issue by saying that BTC wallets included in the proof-of-reserve system do not contain their own funds.
Here is Binance’s BTC reserve
In the sharing of data for November 22, it was seen that the on-chain reserves of the exchange were equivalent to 582,485 BTC, and users had 575,742 BTC (around $ 9.5 billion). It was also included in the data that the reserve ratio was 101%. This reveals that if everyone withdraws their Bitcoin, Binance has enough BTC to process all withdrawals. In addition, the exchange added that anyone can verify their assets via the link here.
Binance recently added that it will share proof of reserve data including other assets in the next two weeks and plans to use third-party checkers for audits.
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