After the collapse of FTX, the biggest fear of crypto money investors was the thought that “one day or if I can’t withdraw my money…”. However, the first reserve report of the world’s largest crypto exchange Binance was also confirmed by the independent audit firm Mazars. Well what does it mean?
Cryptocurrency investors FTX events Afterwards, we saw that they started to withdraw from the stock markets and even give up on investing. However, FTX went down in history as a highly qualified fraud event where only the name of cryptocurrencies was used. Just like in cases like Çiftlik Bank in our country…
After the events, Binance CEO CZ; to the whole industry “Proof of Reserves (PoR)” he called. Just like “independent audits” that ensure that the financial affairs of companies outside the crypto sector are fair, PoR actually stands for “proof of reserve”.
Binance CEO made the call in early November:
“All crypto exchanges should do merkle-tree proof of reserve. Banks operate with fractional reserves. Crypto exchanges shouldn’t be like that. @Binance will start making proof of reserve soon. Full transparency.”
This call from CZ shows that Binance adheres to the text of principles that it published simultaneously with the FTX events. As the world’s largest exchange, Binance to the vision of transparency and decentralization focuses on acting appropriately and improving the ecosystem in a positive way. Of course, these directions of a centralized structure are also open to criticism.
Then, on November 22, Binance announced that it had 582 thousand 485 Bitcoins in its possession, this information was confirmed in the independent audit report:
The independent Bitcoin reserve report of Binance, which was reviewed by Mazars, an international auditing, tax and consultancy company with offices in Turkey, was also published. The figures given in the independent report were the same as the reserves report previously announced by Binance. This shows that after Binance’s call, it completed the process in an exemplary manner for the industry.
The net balance of Binance users was recorded as 575 thousand 722 BTC; which shows that Binance has 101% BTC reserves.
The “proof of reserve” for exchanges is limited to Bitcoin for now. If you have investments in other cryptocurrencies, it is not yet possible to verify these reserves:
According to Mazars’ warning, these proofs of reserve can only be made on Bitcoin reserves for now. If you own cryptocurrencies other than Bitcoin on Binance or another exchange, to remember that the verified data relates only to Bitcoin there is a benefit.
On the other hand, this step of Binance is just the beginning; In the future, we can expect exchanges to publish reserve reports more and more frequently to gain credibility. The publication of these reports may also take place on a weekly, monthly or annual basis, depending entirely on the policies of the exchanges.
For now, it is possible to say that this trend, the first step of which was taken by Binance, will lead the industry in a positive direction and even offer an opportunity to adapt early to the legal regulations on the horizon.