CryptoQuant, a blockchain analytics-providing entity, has issued a report covering the analysis dealing with the proof-of-reserves (PoR) audit of Binance (the biggest crypto exchange across the globe). Centralized crypto exchange platforms including Binance have been brought to the front during the previous month after the downfall of the crypto exchange FTX.
CryptoQuant Says Binance’s Reserves Are Fully Backed
The crypto exchange has been frequently assuring its investors and consumers that there are sufficient reserves possessed by it that are completely supported. As per a report published by CryptoQuant, Binance’s reserves are in a good position according to its analysis. Formerly this month, the crypto exchange issued a report over proof-of-reserves however it was condemned as a partial audit and just a formal process.
Apart from that, the respective report did not discuss the efficiency of the crypto exchange’s internal financial administration, as per John Reed Stark (the former head of the Office of Internet Enforcement under the Securities Exchange Commission). Nonetheless, the findings claimed by Mazars have been supported by CryptoQuant. The firm mentioned that the liabilities described by the crypto exchange are considerably near its assessment of 99%.
It added that the Bitcoin liabilities of Binance have a collateralization of 97% with the support of the assets of the exchange. According to the analytics company, in line with the on-chain data, the stablecoin and Ether reserves of Binance do not express any indication resembling the bankrupt crypto exchange FTX at present. In addition to this, the crypto exchange has admissible transparent reserves, CryptoQuant added.
As per the words of the analytics firm, this signifies that BNB (the local token of Binance) even now occupies a lesser proportion of the cumulative assets on the exchange. As reported by Nansen (a data provider), approximately 10% of the reserves under Binance are kept in its token. An amount of $60.4B is presently held by Binance in its cumulative assets contained in its openly revealed addresses while BNB shares a $6.2B proportion of that sum, Nansen added.
Binance Undergoes a Federal Investigation for Potential Violations
CryptoQuant clarified that the readers should not presume its report to be based on a favorable opinion of the crypto exchange. The data analytics platform’s CEO is of the view that despite the present rumors, the stablecoin reserves of the firm still look very different in comparison with the situation of FTX in advance of its crash. Ki Young Ju additionally disclosed that Zhao and his crypto exchange both are going through a federal inquiry for likely violations.
Substantial fear, uncertainty, and doubt (FUD) have been faced by the crypto exchange this week, leading to the withdrawals of up to $5B from Binance that took place on the 13th of December. This raised concerns regarding a liquidity crisis as well as another bank-run situation. Nevertheless, the scenario stabilized after a day.
Changpeng Zhao (the chief executive officer of Binance) pointed out that the outflows of that day were not even included in the 5 biggest in the history of the exchange. In an event organized on Twitter spaces, Zhao additionally ninety-nine percent of people did not have the adequate equipment necessary for their crypto assets’ self-custody. In his words, the majority of the people who tried it would potentially lose the holdings thereof anyways.