Binance, the largest cryptocurrency exchange in the world, released a proof of reserves (or assets, as the full proof of reserves is reportedly expected only after a few weeks) on November 10 following the collapse of FTX, stating that it held roughly $69 billion worth of coins as of that date, including:

  • 475,000 BTC
  • 4.8 million Ether
  • 58 million BNB
  • 17.6 billion USDT
  • 601 million USDC
  • 21.7 billion BUSD

The creator of Binance, Changpeng Zhao, better known as CZ on Twitter, responded to a question about whether or not these numbers included Binance’s assets by saying they reflect deposits from customers:

He also dismissed Bloomberg’s reporting on the holdings in this tweet, which had stated that almost half of all tokens were in Binance-issued coins (which is not strictly correct, but we won’t get into that right now). I find it more intriguing that Binance’s big revelation not only portrays an unexpected image of the crypto industry as a whole but also raises more questions than it answers.

Assets Held by Binance

The CEO of Binance was fast to disclose the assets held by the company, a move that was both simple and verifiable because he had to refer to the wallet addresses and allow the public to verify the information for themselves.

Assets are only part of the picture, though. Remember that FTX also said it had enough to cover all of its clients, only to discover later that it didn’t. We don’t know for sure, and there needs to be proof to verify CZ’s claim (in the Tweet above) that Binance Holdings represent consumer deposits, but this would suggest that these figures reflect the liabilities it has towards its users.

It’s concerning that he sidestepped the subject by equating liabilities with debt:

It’s simple to find out how much the company has (though even that may be manipulated), but it’s much more difficult to independently verify how much it should have. CZ has done little to soothe those concerns.

It is a little worrisome that these numbers are not readily available, but he pledged to reveal them within a few weeks following a full audit. After all, wouldn’t you expect a company of this size (even if it’s not publicly traded like Coinbase) to be able to crank them out very quickly?

Worse yet, the following realization doesn’t help matters. As a result, Binance exposing its reserves has increased FUD and controversy rather than calming the concern.

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