Crypto exchange giant Binance has enough reserves to back its users’ Bitcoin (BTC), according to global auditing firm Mazars.
The auditing report comes after Binance announced a commitment to increasing financial transparency in the aftermath of the collapse of crypto exchange FTX.
Binance announced in late November a proof-of-reserves (PoR) system to prove a one-to-one ratio of reserves to investors’ assets. Binance first released Bitcoin data, showing a 101% ratio of Bitcoin holdings to customer holdings with an on-chain reserve of 582,485 Bitcoin to their customer net balance of 575,742 Bitcoin, as of 23:59 UTC on November 22, 2022.
Mazars new auditing report, which was requested by Binance for the same snapshot in time, appears to confirm the accuracy of Binance’s contention.
“With the inclusion of In-Scope Assets lent to customers through margin and loans which are overcollateralized by Out-Of-Scope Assets, we found that Binance was 101% collateralized.”
Mazars says that the audit was limited in scale under agreed-upon terms, or Agreed-Upon Procedures (AUP), with Binance.
“This AUP engagement is not an assurance engagement. Accordingly, we do not express an opinion or an assurance conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported.”
As part of the audit, Mazars had Binance make transactions on wallets to prove the addresses were under their ownership.
Binance has committed to providing proof of reserves for other cryptocurrencies like Ethereum (ETH) but has yet to do so at time of writing.
Kraken founder and former chief executive Jesse Powell previously said exchanges could strengthen transparency by disclosing their financial liabilities along with proof of reserves.
According to crypto analytics firm Nansen, with about $67 billion in valued crypto holdings, Binance holds three times more than 11 other exchanges combined.
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