March 21, 2024

Binance Soars Beyond $100 Billion in User Assets Under Custody

Leading crypto exchange Binance has seen its asset under custody hit above $100 billion.

Despite recent legal challenges from the United States Department of Justice targeting both the exchange and its co-founder Changpeng Zhao, Binance has demonstrated resilience, boasting a remarkable milestone: user assets under its custody have surged past the $100 billion mark.

The announcement reveals a staggering doubling of Binance users' assets under custody from $40 billion at the year's onset. The exchange affirmed:

"We hold all user funds at a 1:1 ratio, plus additional reserves, which anyone can verify using Binance’s proof-of-reserves (POR) system. Recent weeks have witnessed a remarkable, sustained uptick in digital asset prices, a trend that has undoubtedly played a significant role in elevating the value of user assets under Binance’s custody."

Binance's proof-of-reserves presently showcases collateralization ratios exceeding 100% for major cryptocurrencies and other altcoins. However, industry experts caution that while proof-of-reserves offer valuable insights into reserves, they only paint half the picture by omitting an entity's liabilities necessary for net equity calculation. CEO Richard Teng asserts Binance's capital structure to be "debt-free", though acknowledges the need for comprehensive assessments.

Emphasizing the importance of accurate reporting, Binance highlights the limitations of blockchain market intelligence firms' aggregate figures, noting the inclusion of Binance's operational funds, thus advocating reliance on their monthly POR audits for precise user asset holdings.

Earlier, Binance made headlines once again by severing ties with its venture capital arm, Binance Labs, despite the latter's impressive returns averaging over 14x on investments, culminating in a $10 billion portfolio. Clarifying the relationship, Binance clarified that Binance Labs operates under license to use its trademark but maintains autonomy from the cryptocurrency exchange and affiliated entities.

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