According to global auditing firm Mazars, crypto exchange giant Binance has enough reserves to support its users’ bitcoin (BTC).
The audit report comes after Binance announced a commitment to increase financial transparency following the collapse of crypto exchange FTX.
Binance announced a Proof-of-Reserves (PoR) system in late November to demonstrate 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 audit report, requested by Binance for the same snapshot, appears to confirm the veracity of Binance’s claim.
“By including in-scope assets lent to clients through margin and loans over-collateralised by out-of-scope assets, we found that Binance was 101% collateralised.”
Mazars says the scope of the audit was limited under agreed terms or Agreed-Upon Procedures (AUP) with Binance.
“This AUP engagement is not an Assurance engagement. Accordingly, we do not express an opinion or conclusion. Had we conducted additional procedures, we might have noticed other matters that would have been reported.”
As part of the audit, Mazars had Binance perform transactions on wallets to prove they owned the addresses.
Binance has committed to providing proof of reserve for other cryptocurrencies such as Ethereum (ETH), but has yet to do so at the time of writing.
Kraken founder and former CEO Jesse Powell previously said exchanges could increase transparency by disclosing their financial liabilities along with proof of reserves.
With around $67 billion in estimated crypto holdings, Binance holds three times more than 11 other exchanges combined, according to crypto analytics firm Nansen.
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