Binance’s Exchange Balances vs Proof-of-Reserves, A Complete Report
Off lately, crypto exchange Binance has been on the radar as the FTX collapse puts investors on a high alert. The crypto exchange recently provided its Proof-of-Reserves report audited by accounting firm Mazars. However, some market players complained that it doesn’t offer a picture of the exchange’s financial health.
On-chain data provider Glassnode has dug further into the matter to look into Binance’s exchange balances and compare it further with its proof-of-reserves. Explaining the difference between exchange balances and Proof-of-Reserves, Glassnode explains:
“Exchange Balance metrics do present is our best estimate of the true balance held on each exchange, quantified as closely, and as verifiably accurate as possible. In contrast, Proof-of-Reserves metrics track only the balance of a (small) set of addresses which are publicly disclosed by the respective exchange”.
In their report, Glassnode has already included the Proof-of-Reserve addresses in the exchange balance metrics.
Binance Exchange Balances Vs PoR
As per the Glassnode data, Binance’s total Bitcoin holdings stand at 584.6k $BTC against the 359.3k $BTC in self-reported Proof-of-Reserves wallets.
Courtesy: Glassnode
Glassnode further explains that there’s greater volatility in the Binance exchange balances this month. They added:
If we look to $BTC inflow/outflows, we can see there have been significant withdrawals of late. 13-Dec recorded 57.3k $BTC in outflows, and the largest net $BTC outflow from Binance in history.
Looking the same for Ethereum, the exchange balances and Proof-of-Reserves are effectively the same around 4.65 million ETH. Relatively, this data brings better confidence in Binance’s reporting.
Courtesy: Glassnode
The flows for ETH in December have been typically stable with one exception. There was a very large 1-day outflow of 456.7k $ETH on 13-Dec. However, the stablecoin outflows have been quite sizeable.
Glassnode notes: “For stablecoins, there has been around $3.2B in combined outflows of $USDT, $USDC, $BUSD, and $DAI from Binance over the last 30-days. Across all exchanges we track, total outflow is $4.8B. This means Binance accounts for 66% of stablecoin outflows, ~in line with market share”.
In an interview with CNBC on Thursday, Binance chief CZ reiterated their position. He stated that the crypto exchange is financially strong. CZ added:
“The well run #crypto exchanges should hold user assets one to one. People can withdraw 100% of the assets they have on @binance. We will not have an issue,” says @cz_binance. “In crypto, there’s no central bank printing money to bail out banks when there’s a liquidity crunch.”
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Filed under: News - @ December 16, 2022 7:08 am