Binance Proves Its Collateralization Ratio with 101% of Bitcoin Backing Customer Deposits

1: mazars, an international audit, tax and advisory firm, confirmed that binance holds more than all of the bitcoin it needs to cover customer deposits. binance reported a 101% collateralization ratio on 575,742 btc in net customer deposits as of midnight utc on november 22. jesse powell, ceo of kraken, criticized binance’s merkle proofs for lacking a dedicated auditor to verify binance’s liabilities. binance began moving large amounts of bitcoin to an unknown wallet in late november.

2: binance implemented its proof-of-reserves system after the collapse of ftx last month. the merkle tree is just hand-wavey bullshit without an auditor to make sure you didn’t include accounts with negative balances. binance had to send bitcoin to a new self-controlled address to prove they control the coins. this accounts for all bitcoin assets, including those circulating on other networks like ethereum, bnb chain, and binance smart chain.

3: binance’s merkle tree proof-of-reserves system allows customers to independently verify the safety of their assets. mazars lets binance users do so by calculating the “merkle leaf” representing their bitcoin holdings on the exchange as of november 22. the statement of assets is pointless without liabilities. binance ceo chanpeng zhao clarified that the large amounts of bitcoin moved to an unknown wallet was part of the proof-of-reserves audit. ftx’s collapse exposed the fact that ftx did not have the crypto on its books to cover an influx of customer withdrawal requests.

https://decrypt.co/116653/independent-audit-confirms-binances-bitcoin-fully-backed

By Evey Lovelace

You May Also Like