Binance Flourishes Amid DOJ Actions, Surpasses $100B in Managed Assets
Summary:
Despite facing actions by the U.S Department of Justice, crypto exchange Binance has seen its managed assets surpass the $100 billion mark, doubling since the start of the year. Despite claims from its CEO of being debt-free and possessing a proof-of-reserves system that ensures 1:1 ratio funds with added reserves, experts warn of the system's shortcomings in neglecting liabilities. Furthermore, Binance has recently announced its split from investment branch, Binance Labs.
Crypto trading platform Binance seems to have weathered the storm of U.S. Department of Justice actions against it and its co-founder, Changpeng Zhao, showing resilience as its managed assets soared past the $100 billion mark as of March 18. The announcement reveals that user assets under Binance's management have more than doubled since the start of the year, increasing from $40 billion. Binance representatives confirmed, "We handle all user funds based on a 1:1 ratio, with additional reserves. This can be confirmed via Binance's proof-of-reserves (POR) system." They also noted that the recent surge in digital asset prices significantly boosted the value of user assets under Binance control. Binance's POR currently reflects over 100% collateralization ratios across all major and alternate cryptocurrencies. However, experts caution that the POR includes only half the information needed to assess the reserves and fails to consider an entity's liabilities when computing its net equity. Binance CEO Richard Teng asserts that the firm's capital structure is "debt-free". Binance also emphasized, "Please be aware that data from blockchain market analysis companies are helpful but the figures are not a precise reflection of user funds on Binance; some of the funds counted are Binance's operational funds. The most accurate information about Binance user asset holdings comes from our monthly POR audits."Binance announced on March 12 that it will sever ties with its investment branch, Binance Labs, despite this branch showing impressive returns on its investments and now holding a portfolio valued at $10 billion. Binance officials clarified, "Binance Labs has permission to use Binance's trademark, but has no other ties with Binance or any related businesses or entities.
Published At
3/18/2024 7:41:06 PM
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