Key Takeaways
- User balances for ETH and BNB registered declines of 2.3% and 1.4%, amounting to 95,000 ETH and 423,000 BNB,
- USDT holdings dipped by 1.2%, resulting in a contraction of 197 million USDT.
In the wake of recent concerns surrounding the transparency of cryptocurrency exchanges’ reserves, Binance, the world’s largest crypto exchange, has taken a proactive step by publishing its latest reserves report. This move comes in the aftermath of the liquidity issue incident involving FTX, prompting exchanges to periodically disclose their reserve holdings to allay investor apprehensions.
Binance’s reserves report unveils a robust financial posture, indicating that the exchange possesses ample cryptocurrency and cash reserves to cover every dollar of user funds. Moreover, the report showcases an additional cushion in the form of reserves exceeding 100% coverage for each crypto asset.
Notably, Binance’s most recent Proof-of-Reserve (PoR) update paints a reassuring liquidity picture. The data underscores that the exchange’s net asset balance surpasses that of its users. Among the stablecoins, USDT commands a prominent position in both the exchange’s and users’ net balance.
Nevertheless, a closer look at the PoR comparison between the present data and that of the previous month unveils a decline in user balances. Specifically, BTC deposits witnessed a 0.6% decrease, translating to a reduction of 3,835 BTC. Similarly, user balances for ETH and BNB registered declines of 2.3% and 1.4%, amounting to 95,000 ETH and 423,000 BNB, respectively. In addition, USDT holdings dipped by 1.2%, resulting in a contraction of 197 million USDT.
DefiLlama’s analysis lends insight into the exchangeās Total Value Locked (TVL) , which experienced an upward trajectory at the year’s outset, surging beyond $5 billion before gradually receding since June. Presently, the TVL stands at approximately $3.2 billion.
While Binance’s report signifies a sound financial standing, scrutiny has fallen on the movements of its USDC reserves post the Silvergate collapse and the depeg of the stablecoin. The PoR report reflects a decrease in Binance’s USDC balance from $3.4 billion on March 1 to $23.9 million by May 1.
Another notable aspect of the updated PoR report is Binance’s substantial holding of XRP. The audit, conducted on August 1, 2023, at 00:00 UTC, reveals that Binance retains a net balance of approximately 2.8 billion XRP, slightly exceeding the cumulative 2.7 billion XRP held by its customers.
This detail suggests a slight overbalance of XRP held by Binance in comparison to its users, with the customer net balance to Binance net balance ratio for XRP clocking in at around 103.5%.
The scope of the reserves report extends to encompass Binance’s net balance ratios against customer net balances. The report showcases ratios such as BTC (105.61%), ETH (102.71%), BNB (113.85%), USDT (117.99%), USDC (101.62%), BUSD (117.90%), LTC (100.94%), and XRP (103.50%).
