CryptoQuant examines Binance’s reserves and finds no evidence of “FTX-like” activity.
This week, Binance was the target of a FUD storm, but a fresh CryptoQuant audit has confirmed its proof of reserves.
A report examining the most recent proof of reserves audit of Binance, the largest cryptocurrency exchange in the world, has been published by blockchain analytics service CryptoQuant.
Following the collapse of FTX, centralized exchanges have gained attention over the past month, none more so than Binance, which has been frantically trying to reassure investors and customers that it has enough reserves and is fully backed.
According to a report by CryptoQuant published on December 14, their investigation shows that the reserves of Binance are accounted for.
Binance published its proof-of-reserves report earlier this month, but it received criticism for being an “Agreed-Upon-Procedure” rather than a thorough audit.
The effectiveness of internal financial controls was also not included in the report, according to John Reed Stark, a former director of the Securities Exchange Commission’s Office of Internet Enforcement.
However, CryptoQuant has backed the auditing firm Mazars’ findings, claiming that the liabilities stated by Binance are extremely near to their 99% estimate.
On-chain data reveals that Binance’s ETH and stablecoin reserves are “not demonstrating ‘FTX-like’ behavior at this point,” the analytics company continued.
Furthermore, it added, “Binance has an adequate ‘Clean Reserve,'” which means that its token, BNB, only accounts for a small portion of the company’s overall assets.
According to data source Nansen, approximately 10% of Binance’s reserves are held in its coin. In their publicly available addresses, Binance presently has $60.4 billion in assets, $6.2 billion of which are BNB, according to their report.
FUD (fear, uncertainty, and doubt) has been a major issue for Binance this week as a result of the exchange’s $5 billion in withdrawals on December 13. The likelihood of a liquidity crisis and a subsequent bank run scenario increased.
Even yet, the outflow wasn’t among the top five largest for the exchange, according to CEO Changpeng Zhao, who claimed that things had steadied the following day.
CZ also asserted during a Twitter Spaces event that 99.9% of people lacked the necessary skills to take care of their cryptocurrency on their own and would almost certainly misplace it.