Binance’s founder and CEO, Changpeng Zhao, stated on Saturday that the exchange’s proof of reserves (PoR) have “absolutely no negative balances involved” following the publication of the PoR.
And absolutely no negative balances involved. It will be verified in the audit for the above PoR.
Actually the first time I heard about a "negative balance" in a PoR. "Innovative"…
We welcome questions and checks. Let's build together.
— CZ 🔶 Binance (@cz_binance) November 26, 2022
Kraken CEO and cofounder Jesse Powell tweeted on Saturday that Binance’s asset statement was “pointless without liabilities.”
I'm sorry but no. This is not PoR. This is either ignorance or intentional misrepresentation.
The merkle tree is just hand wavey bullshit without an auditor to make sure you didn't include accounts with negative balances. The statement of assets is pointless without liabilities. https://t.co/b5KSr2XKLB
— Jesse Powell (@jespow) November 25, 2022
“The merkle tree is just hand wavey bullshit without an auditor to make sure you didn’t include accounts with negative balances,” Powell wrote in the tweet.
Zhao said that the foregoing PoR would be audited and that Binance’s PoR did not apply to accounts with negative balances.
Zhao stated that it takes some time for independent auditors to finish their task.
Since the demise of FTX earlier this month, the release of proof of reserves has been advocated as a way for exchanges to guarantee the safe custody of users’ assets.