Cryptocurrency Exchange Binance’s PoR Reveals Healthy Financial Situation
Cryptocurrency exchange Binance recently released its latest proof-of-reserves (PoRs) report, showcasing transparency in its crypto reserves. The report indicates that Binance holds more than enough crypto and cash to cover user funds, with a ratio of net balances to customer balances exceeding 100% for all assets.
While the report paints a healthy financial picture for Binance, the movement of its USD Coin (USDC) reserves following the collapse of Silvergate has sparked discussions and caught the attention of users on X (formerly Twitter).
The PoR reveals that Binance’s USDC balance dropped significantly from $3.4 billion on March 1 to $23.9 million by May 1. It is important to note that Binance had already started converting customers’ USDC to Binance USD internally in September. However, during this period, the exchange still held a substantial amount of USDC in its reserves.
On-chain data suggests that Binance began converting its USDC reserves into Bitcoin (BTC) and Ether (ETH) immediately after the collapse of Silvergate on March 12. Twitter on-chain analyst Aleksandar Djakovic pointed out that Binance purchased around 100,000 BTC and 550,000 ETH between March 12 and May 1, totaling approximately $3.5 billion – the same as the surplus of USDC in its reserves.
Binance has not yet responded to requests for comments from Cointelegraph.
The revelation of Binance’s USDC reserve movements has generated significant interest, especially after Coinbase CEO Brian Armstrong mentioned during the company’s Q2 earnings call that Binance had sold USDC for another stablecoin.
Proof-of-reserves (PoRs) reports have become a popular way for crypto exchanges to demonstrate their holdings and enhance transparency in the aftermath of the FTX crypto exchange collapse. The calls for more transparency in the crypto ecosystem grew following FTX’s collapse in November 2022, despite its founders claiming a well-balanced financial situation.
