Binance assets under custody have exceeded $100 billion, demonstrating substantial growth compared to the $40 billion earlier this year.
The exchange attributes the increased digital asset prices and its dedication to a secure funds-holding strategy for its growth.
Through Binance’s proof-of-reserves system, all major cryptocurrencies and altcoins are verified to have 100% collateralization ratios.
The assets under custody of the Binance cryptocurrency exchange have surpassed $100 billion as of March 18. This accomplishment signifies a substantial increase from the $40 billion available in the previous year. Binance credits this growth to various factors, such as the rise in digital asset prices and the exchange’s dedication to maintaining a 1:1:1 ratio of user funds with additional assets. Binance’s proof-of-reserves (POR) system greatly supports the assurance process. This system allows for the verification of 100% collateralization ratios in all major cryptocurrencies and altcoins.
Despite the U.S. Department of Justice taking action against the exchange and its co-founder Changpeng Zhao, Binance is a resilient company here to stay. The exchange has emphasized the importance of its proof-of-reserves system in demonstrating its commitment to meeting customer withdrawal requests. This method was introduced in November 2022 following FTX’s bankruptcy, and in February 2023, it underwent enhancements to enhance audit efficiency and transparency.
The Binance CEO emphasizes the exchange’s commitment to being debt-free.
One of the key ways they demonstrate this is through proof-of-reserves, which is a crucial part of their transparency efforts. This practice not only showcases their financial robustness but also safeguards customer assets. Nevertheless, despite the positive aspects of POR, it is essential to note that it only provides a partial view of the overall picture. Financial experts highlight omitting crucial information regarding the exchange’s liabilities and net equities. However, according to Richard Teng, the CEO of Binance, the exchange maintains a “debt-free” capital structure, which enhances confidence in the financial stability of the platform.
The panel also addressed concerns regarding the accuracy of user funds calculators provided by blockchain market intelligence firms. It is important to note that these figures provide some insight but may only partially represent the amount of user funds on Binance. This discrepancy arises because certain assets used in these calculations represent the operational funds of the exchanges. For the most accurate information on user asset holdings, Binance recommends referring to its monthly POR audits.
Crypto Fund Achieves Strong Performance, Breaks Away from Parent Company
In a previous report, Binance mentioned that it had decided to end its association with its venture capital arm, Binance Labs. Binance Labs, with an impressive average return of over 14 times on its investments and a portfolio now valued at $10 billion, aims to establish operational independence from the Binance cryptocurrency exchange and its affiliated businesses. Despite being licensed to use the Binance trademark, Binance Labs has no other connection with the exchange.
