Binance PoR Audit Complete: BTC Reserves 101% Collaterized
- Mazars shared the proof of reserves (PoR) audit report of leading crypto exchange Binance.
- It was confirmed that the exchange’s Bitcoin reserves are 101% collaterized and amount to a value of 575,742 BTC.
- This means that the firm’s BTC holdings exceed its liabilities/customer assets.
- The exchange engaged the international audit, tax, and advisory firm to verify its proof of reserves last month.
- KuCoin has also taken the help of Mazars to verify its PoR.
Binance, the world’s biggest crypto exchange, had recently engaged international audit firm Mazars to verify its proof of reserves, and the exchange underwent an audit in order to display greater transparency following the implosion of the multi-billion dollar crypto exchange FTX.
As a result of the audit, it was verified by Mazars that the Bitcoin (BTC) reserves of Binance are collaterized by 101% which basically means that the exchange has more BTC in its holdings that its liabilities/customer assets which currently amount to a value of 575,742 BTC. Therefore, verifying the on-chain data of the firm, the auditor was able to ensure consumers that the funds on the platform are safe.
Interestingly, Mazars Veriitas auditing service verified that all the Bitcoin balance circulating on the crypto exchange are fully accounted for and the CEO of Binance, Changpeng Zhao, is not fooling the crypto space with just words of transparency. Furthermore, these figures match with the ones shared by Zhao, also known as CZ in the crypto space, and his team via Twitter, which amounted to 582,485 BTC.
Binance released its proof of reserves system last month and several exchanges followed the example. The leading crypto exchange stated that this was its next step in its efforts “to provide transparency on user funds.” Additionally, in the next couple of week, the proof of reserves of several other networks and tokens will also be released, and possibly verified by audit firm Mazars which audited its Bitcoin reserves.
The Bitcoin collaterization shared by Mazars includes all the BTC balance on the exchange on different blockchains, i.e., the native Bitcoin blockchain, as well as on Ethereum, BNB Chain, and Binance Smart Chain.
On the other hand, Mazars was also appointed by the 4th biggest crypto exchange in terms of spot and derivatives trading volume, KuCoin, to verify the exchange’s proof of reserves. KuCoin stated that the report from Mazars will come out in a few weeks on the official website of the crypto exchange. The international audit, tax, and advisory firm will provide a third-party factual findings report for the exchange’s customers.
However, the CEO of a crypto exchange, which recently laid of 1,100 employees, Kraken, Jesse Powell, believes that the PoR verification is useless. PoR is merkle tree proofs which indicate that the funds of the users are not being misused via blockchain-based evidence.
Jesse Powell stated that Merkle Tree proofs are not enough to prove an exchange’s solvency because they do not provide information related to the firm’s liabilities. In response to this, Binance has implemented a PoR verification with the help of Mazars. Interestingly, Kraken itself provided its PoR along with proof of liabilities shortly after FTX demise.