Outside Source
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 released its latest Proof-of-Reserves (PoR) report. The effort’s main goal is to show that the exchange has enough crypto assets to cope with all customers’ withdrawals, with reserves available in case of emergency.
“When we say Proof of Reserves, we are specifically referring to those assets that we hold in custody for users. This means that we are showing evidence and proof that Binance has funds that cover all of our users assets 1:1, as well as some reserves,” the report reads.
The latest data reveals that the company holds over 61.2 trillion Shiba Inu (SHIB) tokens, resulting in a 102.63% ratio. Calculated at current rates, the stash equals more than $1 billion. It is worth noting that the figure represents a slight decrease compared to the 61.45 trillion tokens reported in September.
Binance’s Ripple (XRP) holdings are just as impressive. As of the moment, the company has more than 2.9 billion tokens (equivalent to $1.56 billion). This means a nearly 6% increase from the figure observed last month.
The exchange’s PoR report includes 29 different cryptocurrencies, with Bitcoin and Ethereum being part of the club. Binance owns a staggering 636,229 BTC, worth over $40 billion and 4.4 million ETH ($10.9 billion).
The Birth of the Effort
Binance adopted the PoR practice in November 2022, shortly after the FTX meltdown, which undermined the legitimacy of the entire cryptocurrency industry. Such regular reports aim to build trust and transparency among users by verifying that the firm holds sufficient assets to cover customer deposits.
Recall that the once-prominent FTX collapsed nearly two years ago due to a severe liquidity crisis and allegations of mismanagement. It was accused of misusing clients’ funds to support its sister trading firm, Alameda Research.
This was followed by a massive withdrawal rush, which FTX couldn’t meet due to a shortfall in assets. In the aftermath, it filed for Chapter 11 bankruptcy protection, while its former CEO – Sam Bankman-Fried (SBF) – was sentenced to 25 years in prison after being found guilty on multiple counts of fraud and conspiracy.
This article first appeared at CryptoPotato
