Bitcoin Reserves Of Binance Are 101% Backed: Auditor Mazars

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Binance, the largest cryptocurrency exchange in the world, confirmed that every Bitcoin that is in circulation on the platform has now been accounted for.

Due to the audit, every user of the exchange can verify the security of their Bitcoin balance by examining public blockchain information.

On November 22nd, Binance’s Bitcoin was found to be collateralized at a rate of 101% by the auditing firm Mazars Veriitas. This suggests that its Bitcoin holdings are just slightly more than its liabilities/customer assets of 575,742 BTC.

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This number coincides with the 582,485 BTC in net Bitcoin assets that Binance revealed in its presentation of their proof of reserves last month.  Bitcoins circulating on Ethereum, BNB Chain, and Binance Smart Chain are also included in this category.

Crypto Community Wary Of Exchanges

As a result of the demise of FTX, the cryptocurrency community is now much more wary about crypto exchanges lending out customer deposits, leading to a rise in the adoption of proof of reserves.

Sam Bankman-Fried, the former CEO of the now-defunct exchange, has admitted that users were exchanging false Bitcoin on the site. With the use of Merkle-tree proofs, users can have confidence that their assets are secure in the blockchain.

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Users can verify their on-chain balance by pasting their Merkle hash from Binance into a tool provided by Mazars’ auditing portal.

However, as the CEO of Kraken, Jesse Powell, highlighted last month, Merkle Tree proofs are not sufficient to verify the solvency of an exchange because they do not disclose any information on the liabilities of a specific company.

To ensure the financial stability of the organization, the tool should be used with an expert audit of the debts in question. Shortly after FTX’s collapse, Kraken released its own Proof of Reserves along with proof of liabilities, allowing users to confirm that their accounts were audited.

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