- A global audit firm confirmed Binance has more BTC to protect customer deposits.
- The auditor noted that Binance has a 101% collateralization ratio on 575,742 Bitcoin
- Previously, Kraken’s CEO called Binance’s PoR bullshit without an external audit.
On Wednesday, Mazars, a global audit, tax, and advisory firm, confirmed that the most significant crypto asset manager, Binance, has more Bitcoin on hand than is required to cover customer deposits.
The firm’s page providing Binance’s proof-of-reserves and proof-of-liabilities verification read:
At the assessment time, Mazars observed Binance controlled in-scope assets over 100% of their total platform liabilities.
The auditor noted that Binance has a 101% collateralization ratio on 575,742 Bitcoin (BTC) net customer deposits as of November 22, 2022. Interestingly, the data matched the one given by Binance in its first proof of reserves report from last month.
Previously, Jesse Powell, CEO of Kraken, a rival crypto exchange, questioned the integrity of the proof-of-reserve (PoR) the Binance exchange earlier posted, claiming it was not a PoR but an intentional misrepresentation. He added:
The Merkle tree is just hand-wavey bullshit without an auditor to ensure you didn’t include accounts with negative balances. The statement of assets is pointless without liabilities.
In a tweet on November 22, the Kraken CEO argued that an authentic proof-of-reserve must include a sum of client liabilities, excluding negative balances, and user-verifiable cryptographic proof of the aggregate.
Despite the recent confirmation by the audit firm, some crypto enthusiasts asked the Binance CEO whether there would be an independent audit on liabilities against the reserves. The CEO, Changpeng Zhao, said ‘yes,’ adding that the exchange does not owe any loans to anyone.
Notably, Binance implemented its proof-of-reserves system after the collapse of FTX last month, which exposed the fact that FTX did not have the crypto on its books to cover an influx of customer withdrawal requests.
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