‘Too big to fail’ you thought? The fall of FTX has shown that even large crypto exchanges can be financially weaker than you think. Exchanges therefore put their best foot forward by showing that the tokens on your account are really yours. You can also check it on Binance now.
Proof of Reserves for BTC on Binance
In a press release Binance writes that from now on you can check whether the bitcoins you have on the exchange are really yours. This is important, because some exchanges secretly use the funds of some of their users to make extra profit. Trading platforms make money by charging a small commission on trades you make. By giving you insight into the reserves, Binance hopes to regain your trust.
Unfortunately, the feature only pertains to bitcoin (BTC) at the moment. The exchange does say in one tweet that other assets will be added in the coming weeks. In any case, ether (ETH), USDT, USDC, BUSD and BNB are part of this, whether more assets will be added later is not clear.
As part of our ongoing commitment to transparency, we have provided new updates on #binance‘s Proof of Reserves.
Further updates for $ETH, $USDT, $USDC, #BUSD & #BNB will be coming in the near future.
Stay tuned.
— Binance (@binance) November 25, 2022
Check your own coins on Binance
You can check for yourself whether Binance keeps your tokens separate via the web page of the audit. For this you have to log in, after which you will immediately see whether the bitcoins that Binance says to keep for you are really there.
Unfortunately, this is a snapshot. The exchange polled customers’ BTC reserves at 1:12 am on November 22, only this is visible. The reserves are therefore not monitored in real time. Whether this will be the case in the future is unknown. At the time of the snapshot, it had about 576,000 BTC on its balance sheet for customers, which is about 9 billion euros at the time of writing.