Cryptocurrency exchange Binance announced that its assets under custody have surpassed $100 billion as of March 18. This milestone represents a significant jump from the $40 billion available a year earlier. Binance attributes this growth to a combination of factors, including the surge in digital asset prices and the exchange’s commitment to holding user funds 1:1 with more assets.
One of the key players in this guarantee is Binance’s Proof of Reserves (POR) system, which makes it possible to verify 100% guarantee ratios across all major cryptocurrencies and altcoins.
Despite facing action from the US Department of Justice against the exchange and its co-founder Changpeng Zhao, Binance is a company that will not go away easily. The exchange has emphasized the crucial role of its Proof of Reserves system in demonstrating its ability to meet customer requests regarding withdrawals. The method was launched in November 2022 following the bankruptcy of FTX. In February 2023, it was updated to improve audit efficiency and transparency.
Binance CEO Emphasizes Debt-Free Nature of Exchange Proof of reserves by an exchange is one of the most important elements of the exchange’s transparency initiatives, as it reveals its financial strength and protects customer assets. However, while the POR has its positive aspects, experts point to the fact that it only presents the relevant part of the picture, as details about the exchange’s liabilities and net worth are left out. However, Binance CEO Richard Teng said that the exchange has a “debt-free” capital structure, which boosts confidence in the company’s financial stability.
The panel also discussed concerns about the accuracy of user funds calculators provided by blockchain market intelligence firms. They explained that these numbers are useful, although they may not fully reflect the true amount of user funds on Binance. This discrepancy is due to the fact that some of the assets included in these calculations are actually the operating funds of the exchanges. For more accurate information on user asset holdings, Binance suggests reviewing its monthly POR audits.
High-Performing Crypto Fund Separated From Parent Company In a previous report, we reported that Binance announced that it would be severing ties with its venture capital arm Binance Labs. Despite Binance Labs having an average return of over 14x on its investments, its portfolio is now worth $10 billion. The separation is intended to clarify the operational independence of the two entities. Although Binance Labs has licensed the use of the Binance brand, it does not maintain any other relationship with the cryptocurrency exchange Binance or any affiliates.
