Mazars, an international audit, tax and advisory firm, confirmed on Wednesday that Binance has more than all the Bitcoin it needs to cover customer deposits.
“At the time of the assessment, Mazars observed Binance-controlled assets in excess of 100% of their total platform liabilities,” the firm’s statement said published page provides Binance’s proof-of-reserve and proof-of-liability confirmation.
The company reported a 101% security ratio of 575,742 BTC in net customer deposits at midnight UTC on November 22, corresponding to the made sure of by Binance in its first proof of reserves report last month. This accounts for all Bitcoin assets, including those circulating on other networks such as Ethereum, BNB Chain and Binance Smart Chain.
Binance quickly implemented its proof-of-reserve system after the collapse of FTX last month, which exposed the fact that FTX had no crypto on its books to cover an influx of customer withdrawal requests. In a Twitter Spaces interview last week, the exchange’s disgraced CEO Sam Bankman-Fried said agreed that the company actually allowed users to trade non-existent Bitcoin.
The Merkle Tree proof-of-reserves system uses blockchain data that allows customers to independently verify the security of their assets, ensuring they are not lent or stolen without permission. Mazars now allows Binance users to do so by calculating the “Merkle Leaf” that represents their Bitcoin holdings on the exchange as of November 22 by pasting their account’s “Merkle Hash” into the tool.
Binance’s proof of reserves report last month was initially met with suspicion by Jesse Powell, CEO of Kraken, a rival exchange that used its own proof of reserves system well before FTX’s fallout. His criticism specifically boiled down to Binance’s Merkle proof that lacked a dedicated auditor to verify Binance’s commitments.
“The Merkle tree is just hand-waving nonsense without an auditor to make sure you don’t include accounts with negative balances,” he so. “The array of assets is meaningless without liabilities.”
Some in the crypto community also became suspicious of Binance after it began moving large amounts of Bitcoin to an unknown wallet in late November. Binance CEO Chanpeng Zhao clarified that this was part of the proof-of-reserves audit, which requires Binance to send Bitcoin to a new self-controlled address to prove they control the coins.
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