Binance is under fire this week and many people are choosing to move their crypto away from the exchange. The reason for this lies, among other things, in a Proof-of-Reserves report that Binance had published by Mazars Veritas last week. Mazars Veritas is a reputable organization, but there are some people who have doubts about the report.
CryptoQuant has no doubts
However, if it is up to CryptoQuant, Binance is doing well financially. A December 14 report from the company confirms that Binance has the reserves it claims to have. The criticism of Mazars Veritas’ Proof-of-Reserves report is that it was merely an agreement with Binance to check some superficial things. While it was not about a complete check of the stock exchange’s books and databases.
However, CryptoQuant now endorses the audit by stating that the debts found by Mazars Veritas match their own estimates. “The report shows that Binance’s Bitcoin debt (customer-driven) is 97 percent backed by the exchange’s assets. That coverage grows to 101 percent if Bitcoin lent to customers is also included,” said CryptoQuant.
Furthermore, CryptoQuant comes to the conclusion that Binance’s Ethereum and stablecoin reserves do not currently exhibit “FTX-like behavior”. Also, according to CryptoQuant, Binance’s reserves are largely “clean”, meaning that its own BNB token forms only a small portion of the reserves.
$60 billion in assets
If all of Nansen’s estimates are correct, Binance has a total of $60.4 billion in assets under management. Of this, $ 6.2 billion consists of its own BNB token, which is about 10 percent of the reserves. Binance has had a lot to deal with this week, ultimately resulting in $5 billion in withdrawals from the platform.
Fears of a liquidity crisis at the industry’s largest stock exchange increased for a while, but the storm has since subsided. Changpeng Zhao also announced earlier this week that the outflows at the stock exchange are not even among the top five largest outflows. So it looks like we don’t have to worry about that.