Binance reports reserves for 24 assets
The total amount of funds available for verification exceeded $63 billion
![Binance reports reserves for 24 assets](https://storage.getblock.net/source/1/lawq6OJHhJt9m9nS0rjNlPSca7_Gm8VT.webp)
08.03.2023 - 07:15
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3 min
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What’s new? On March 7, crypto exchange Binance added 11 new tokens to its Proof-of-Reserves (PoR) system: MASK, ENJ, WRX, GRT, CHR, CRV, 1INCH, CVP, HFT, SSV, and DOGE. The total amount of funds available for verification exceeds $63 billion in 24 assets. Binance emphasized that all user funds are always collateralized at a 1:1 ratio, as well as additional reserves.
What else is known? The proof-of-reserve system was introduced by the exchange in late 2022 as part of a broader effort to increase transparency for users. PoR uses a “Merkle tree” algorithm in its operation.
Merkle trees organize data (such as transactions in smart contracts or transfers between accounts) into hashes arranged as a series of parent and child nodes, which theoretically allows a third-party auditor to verify the relevance of reserves in cryptocurrency services.
In February 2023, Binance made a significant update to the system by implementing zk-SNARK, a zero-knowledge protocol, which is designed to increase the privacy and security of user data in the system. This update was the first time such technology has been implemented in a centralized exchange (CEX).
The cryptographic protocol zk-SNARK conceals data about the source, amount, and recipient of payment while allowing one to prove that the payment passed and that the correct number of tokens is in the recipient’s account.
The network snapshot was taken at 00:00 UTC on March 1, 2023. At that time, all 24 assets were overcollateralized. For the USDC stablecoin, the reserve percentage was 5940,54%, for BUSD it was 128,82%, and for BNB it was 123,86%.
After the FTX crash, many exchanges brought in third-party auditors to review reserves, including Binance, OKX, KuCoin, and BitMEX. However, according to Michael Burry, American financier and “Big Short” hero, auditing crypto exchanges’ proof-of-reserves does not make sense.
In late December 2022, Mazars, the reserve auditor for Binance, Crypto.com, and KuCoin, suspended all work for the crypto companies. Later, the US Securities and Exchange Commission (SEC) increased oversight of crypto companies’ auditors, after which they began refusing to cooperate for fear of litigation.
According to businessman Kevin O’Leary, institutional investors are losing interest in the digital asset market, which could lead to another collapse of large crypto companies.
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