As a seasoned researcher with years of experience in the crypto space, I can’t help but admire Binance’s proactive approach to transparency and accountability. The Proof-of-Reserves report is a testament to their commitment to building trust among users, especially in light of the FTX fiasco that shook the industry just a few months ago.
TL;DR
- Binance’s latest Proof-of-Reserves report shows full backing of customer assets.
- The effort aims to increase transparency after FTX’s collapse.
It’s Time for PoR Again
Binance recently published its most recent Proof-of-Reserves (PoR) report, which aims to demonstrate that the platform holds sufficient cryptocurrency assets to cover all customer withdrawal requests and has reserves on hand for unexpected situations.
As a crypto investor, I’d express it like this: “When we talk about Proof of Reserves, we’re pointing to the funds that Binance holds on behalf of our users. This means we’re providing evidence and proof that Binance has assets equivalent to each user’s holdings, plus additional reserves for safety.
As an analyst, I recently uncovered some fresh data indicating that our company currently owns approximately 61.2 trillion Shiba Inu (SHIB) tokens. This ownership equates to a ratio of 102.63%. At present exchange rates, this substantial holding translates to over $1 billion in value. It’s important to mention that this amount represents a slight decrease from the reported 61.45 trillion tokens we had in September.
At present, Binance’s holdings of Ripple (XRP) are considerable, totalling over 2.9 billion tokens, which is equivalent to approximately $1.56 billion. This represents a nearly 6% rise compared to the amount reported last month.
The report from the trading platform lists 29 distinct digital currencies, among which are Bitcoin and Ethereum. Notably, Binance holds approximately 636,229 Bitcoins, valued at more than $40 billion, as well as around 4.4 million Ethereum, worth over $10.9 billion.
The Birth of the Effort
In November 2022, Binance began using Proof of Reserves (PoR) methodology, following closely on the heels of the FTX collapse, which raised concerns about the credibility of the entire cryptocurrency sector. These regular reports serve to establish trust and transparency among users by demonstrating that the company possesses sufficient assets to secure user deposits.
Remember that FTX, which was once a significant player, almost two years ago found itself in trouble due to a critical liquidity issue and accusations of poor management. It is alleged that it diverted clients’ funds towards the upkeep of its associated trading firm, Alameda Research.
After a significant withdrawal surge, which FTX couldn’t accommodate due to a lack of sufficient assets, they were forced to seek Chapter 11 bankruptcy protection. Meanwhile, their former CEO, Sam Bankman-Fried (SBF), was sentenced to 25 years in prison following his conviction on numerous charges of fraud and conspiracy.
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2024-10-09 16:48