Binance crypto exchange creates Bitcoin reserves – Buy IMPT token for another 2 days for $0.023

Binance Bild

In November, while crypto exchange FTX was experiencing one of the biggest crashes in the history of the crypto market, Binance CEO Changpeng Zhao went public. Not only was CZ one of the first to publicly address FTX’s woes on Twitter, but he even offered Sam Bankman-Fried, FTX’s former CEO, a takeover of the teetering competitor.

Binance promotes greater transparency on crypto exchanges

However, as is well known, the market did not take off and FTX is now a case for law enforcement agencies and many customers continue to wait to deposit the funds with the crypto exchange. However, the Binance boss used the fall of the competitor to campaign for much more transparency in the crypto industry. Exchanges should prove that they actually have said crypto reserves, so customers don’t have to worry about their deposits. Because at FTX, it appears that the deposited funds were used elsewhere, which meant that the exchange ultimately did not have more liquidity to make the payments required during the crash.

In CZ’s opinion, something like this should not happen again if the market wants to rebuild confidence. In the meantime, however, other market participants are known to be in financial difficulties. In some cases, bankruptcy has already been declared, but in some cases it is not clear how bad it really is with individual stock exchanges and what the rumors are about. The focus is currently on the Digital Currency Group.

What is really going on with Genesis and Greyscale?

Its subsidiary includes the Genesis company, which appears to be under severe liquidity pressure. There is speculation in the media that there is a gap of at least 1 billion dollars. The group also includes the asset manager Greyscale, which is said to have managed more than 50 billion US dollars in assets for its clients in 2021. It is not yet predictable how things will continue here and how bad the effects will be on the market.

So, although the crisis does not seem to be over yet, the world’s largest crypto exchange Binance is still trying to put itself in a good light and at least protect its own customers. However, Binance is likely to expect that many customers will be able to transfer their funds from other exchanges to Binance if it can establish a reputation as the safest provider in the industry.

Binance is getting bigger compared to other crypto exchanges

Already, figures from crypto analysis firm Nansen show that Binance has about $67 billion in estimated crypto holdings, three times more than 11 other exchanges combined. So the FTX crash probably did the least damage to Binance. On the contrary: Ultimately, Binance could emerge from the crisis as a major beneficiary.

To do this, CZ needs to follow through on its big announcements and prove that it is actually doing better than the competition and that customer funds are safe with Binance. Back in November, CZ posted a few crypto exchange cold wallet addresses and balances on Twitter. Among them were 475K BTC, 4.8M ETH, 17.6 billion USDT, 21.7 B BUSD, 601 million USDC and 58M BNB.

Binance Releases First Reserves Report

But now Binance can take a much bigger step by presenting the first Proof-of-Reserves (PoR) audit report. Conducted by the South African business unit of international accounting, tax and advisory firm Mazars, this is said to be based on various methods to verify that Binance actually has enough assets to cover 100 percent of customer withdrawals in always.

Now Mazars announces that Binance has successfully passed the Proof of Reserves. To do this, the audit firm independently compared the asset balances of wallet addresses on the BNB Chain, Bitcoin, Ethereum and Binance Smart Chain with the Binance management balance sheet report. The examiners found almost no deviations. These were only within a tolerance range of less than 1 percent. According to the auditors, this is proof that the crypto exchange really has enough assets to be prepared for a big wave of withdrawals. FTX, on the other hand, was unable to do this at the time and was unable to process customer payments.

Inspectors determine 101 percent protection

In order to prove that the mentioned wallets are actually owned by Binance, Binance management also had to perform a transaction that can only be done by the owner of the private keys. In another step, Binance management actions were tracked with custom internal code scripts.

Reports showed the funds owed and received to customers and the numbers were checked to match customer balances using Merkle Tree’s proprietary generator. The Merkle root hash is a cryptographically secure fingerprint that an auditor can use to verify exchange assets. Merkle root, in turn, allows for authentication while blocking direct access to customer information. According to the auditors’ findings, the position of customers who trade derivatives is 101 percent hedged. Accordingly, there is no risk for the customer. However, only Bitcoin buyer sites were checked here and not for other cryptocurrencies.

Distrust continues in the market

Of course, Binance considers its first Proof of Reserve by an external auditor to be a great success. However, the measure cannot completely eliminate all doubts. There is still doubt in the market as to how reliable the crypto exchanges really are. For example, it has been criticized that the audit company Mazars is relatively unknown to many. According to Mazars, it has only checked those areas of Binance approved by the company. Critics say the crypto exchange may temporarily borrow assets during an upcoming audit to see if it actually has the reserves.

Critics also say that Binance and other crypto exchanges do not have to comply with accounting regulations. This could be partly compensated by regular external audits to build confidence among customers. However, according to market observers, there is still no alternative from the regulatory authorities that impose stricter regulations and controls on the crypto exchanges, so that the exchanges have certain credit balances, as classic banks have to, for example , to create.

Buy another 2-day IMPT token for $0.023 as a pre-sale

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Big jump in sight for bitcoin (BTC) and ether (ETH)?

Big jump in sight for bitcoin (BTC) and ether (ETH)?

Interview: Vladimir Fomene, Bitcoin (BTC) Developer.

Interview: Vladimir Fomene, Bitcoin (BTC) Developer.