Binance Makes Transparency Promise, Reveals $40 Billion in Stablecoin Reserves
According to CEO Changpeng ‘CZ’ Zhao, Binance is utterly devoted to transparency. As evidence, it has disclosed information on its cold wallet reserves.
CZ, the CEO of Binance, stated on November 10 that the exchange will reveal cold wallet addresses and balances for its top six cryptocurrencies.
The action is a reaction to the aftermath of the FTX exchange’s collapse this week. Once the second-largest centralized exchange, its demise was precipitated by excessive leverage and a flood of withdrawals.
By committing to openness on its reserves, Binance hopes to reassure its clients that it has sufficient funds. CZ said that this information was previously accessible, but it is now simpler to understand and obtain.
The Bitcoin cold wallet of Binance reportedly includes 475 000 BTC. At the current market price, this is worth almost $8 billion. It has Ethereum reserves of 4,8 million ETH, which are now valued slightly under $6 billion.
The listings of cold wallets also showed about $40 billion in stablecoins USDT, BUSD, and USDC. Binance has a staggering 27% of all stablecoins in circulation, making it a monster when it comes to stablecoin reserves. The underpinning of that enormous stockpile of stablecoins has not been fully exposed as of yet.
Additionally, the corporation said that a Merkle tree proof-of-reserves would be issued within the following weeks.
CZ said on November 9 that all crypto exchanges need to implement proof-of-reserves. Banks operate with fractional reserves. He said, “crypto exchanges should not.”
Chainlink, a data oracle supplier, has been promoting its own proof-of-reserve technologies lately. Chainlink PoR was introduced in 2020, but its utility has never been stronger than it is today.
An immutable proof-of-reserve contract may be used to prove the existence of adequate, independently audited reserves. The objective is to build investor trust in the exchange or the assets being traded.
Also Read: Bloomberg Reports The SEC And CFTC Are Investigating FTX