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CryptoQuant Verifies Binance’s Reserves, Reports no ‘FTX-like’ Behavior

Binance has been the target of a FUD campaign this week, but a new CryptoQuant audit has confirmed its proof of reserves.

CryptoQuant, a blockchain analytics provider, has released a report analyzing the recently released proof of reserve audit of Binance, the world’s largest crypto exchange.

Following the demise of FTX, centralized exchanges have been thrust into the spotlight, none more so than Binance, which has been scrambling to reassure customers and investors that it has sufficient reserves and is fully backed.

According to a report published on December 14 by CryptoQuant, its analysis confirms that Binance’s reserves are fully accounted for.

Binance released its proof-of-reserves report earlier this month, but it was criticized for being a “Agreed-Upon-Procedure” rather than a full audit.

According to John Reed Stark, former chief of the Securities and Exchange Commission’s Office of Internet Enforcement, the report also failed to address the effectiveness of internal financial controls.

However, CryptoQuant has backed up audit firm Mazars’ findings, stating that Binance’s liabilities are very close to its 99% estimate.

“According to the report, Binance’s BTC liabilities (customer deposits) are 97% collateralized by exchange assets. When the BTC lent to customers is factored in, collateralization rises to 101 percent.”

According to the analytics firm, on-chain data indicates that Binance’s ETH and stablecoin reserves are “not exhibiting ‘FTX-like’ behavior at this time.”

“Additionally, Binance has an acceptable ‘Clean Reserve,’ which means that its own token, BNB, remains a small proportion of its total assets,” it said.

According to Nansen, approximately 10% of Binance reserves are held in its token. Binance currently holds $60.4 billion in total assets in publicly disclosed addresses, with BNB accounting for $6.2 billion of that total, according to the company.

Following $5 billion in withdrawals from the exchange on December 13, Binance has faced a lot of FUD (fear, uncertainty, and doubt) this week. Fears of a liquidity crisis and another bank run began to rise.

The situation, however, stabilized the next day, and CEO Changpeng Zhao reported that the outflow was not even among the top five largest for the exchange.

CZ also stated in a Twitter Spaces event that 99% of people are unprepared for self-custody of their crypto and will most likely lose it one way or another.

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