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- Binance has released its 12th audit of reserves held on the exchange which proves all its digital assets are 100% backed.
- These audits were introduced by former CEO Changpeng Zhao who recently stepped down and is facing sentencing in the U.S.
Binance, the world’s largest cryptocurrency exchange by trading volume has released its 12th audit of reserves held on the exchange. Conducted on January 01, the published report reveals that 597,658.074 Bitcoins (BTC), 4,265,238.882 Ethereum (ETH), nearly 32 million BNB and USDT stablecoins reached 16.85 billion, 123.20%, and all coins held by customers on the exchange are 100% backed. This is a huge step in assuring customers that their investment is in safe hands.
The release of the report is timely, given that the exchange has recently undergone some major leadership changes. As CNF reported, co-founder and former CEO Changpeng Zhao ‘CZ’ recently pleaded guilty to violations related to the Bank Secrecy Act (BSA), and failing to register as a money-transmitting business. On top of that, he pleaded guilty to failing to maintain a proper anti-money laundering (AML) program. He also agreed to pay over $4 billion to resolve the investigations into the violations by the Justice Department. His exchange agreed to exit the U.S. market. CZ was further banned from taking any management position in the company for three years.
In a recent development, CZ has been barred from leaving the U.S. District Judge Richard Jones ruled that CZ cannot return to the United Arab Emirates (UAE) before his sentencing as he poses a flight risk. As a result, John Reed Stark, a former chief at the SEC Office of Internet Enforcement, has argued that CZ might be looking at a ten-year prison time on the lower side.
One of the legacies left by CZ is the release of Proof of Reserves (PoR) introduced by the founder in 2022. These reports help exchanges prove that customer assets are safe by disclosing all the digital assets held in the exchange’s wallets.
All crypto exchanges should do merkle-tree proof-of-reserves.
Banks run on fractional reserves.
Crypto exchanges should not.@Binance will start to do proof-of-reserves soon. Full transparency.— CZ 🔶 BNB (@cz_binance) November 8, 2022
These reserves further prove that exchanges are not misappropriating customer assets as recently witnessed in the FTX exchange case. In the FTX case, it was revealed that founder and former CEO Samuel Benjamin Bankman-Fried, or SBF, had misappropriated billions of dollars in customer holdings. SBF has since been charged and faces decades behind bars.
Despite the exchange initially facing an avalanche of withdrawals when reports of the case against it emerged, it is clear that the ship is now steady. Not only have deposits been coming back but it is clear that the exchange remains popular with traders. However, a significant share of its market has been taken by Coinbase, paving the way for the publicly traded company to dominate the U.S. market.
Binance coin (BNB) which is backed by the exchange has recorded a nearly 2% rise in the last 24 hours. At the time of press, the token is trading at $304. The 4th ranked coin has recouped its weekly losses which stand at nearly 5%.
