According to Mazars, global auditors Mazars has found that Binance, a crypto exchange giant, has sufficient reserves to support its users’ Bitcoin (BTC).
After Binance’s announcement of a commitment to financial transparency following the collapse of crypto exchange FTX, the audit was completed.
In late November, Binance unveiled a proof-of-reserve (PoR) system that proves a 1:1 ratio of assets to reserves. Binance released the first Bitcoin data. It showed a 101% ratio between customer and Bitcoin holdings. This was based on a customer net balance of 575 742 Bitcoin and an on-chain reserve of 582 485 Bitcoin.
Binance requested Mazar’s audit report for the same snapshot. It appears that Mazar’s most recent audit report confirms Binance’s assertion.
“Binance was 101% secured by the addition of In-Scope Assets that were lent to customers via margin and loans that have been overcollateralized with Out-Of-Scope Assets.”
Mazars claims that the audit was conducted under agreed terms or Agreed-Upon procedures (AUP), in collaboration with Binance.
This AUP engagement does not constitute an assurance engagement. We do not give an opinion or make any assurances. We might have discovered other issues if we had performed additional procedures.
Mazars requested that Binance execute transactions on wallets as part of their audit to verify the addresses were in their possession.
Binance has promised to provide proof of reserves for Ethereum (ETH), but has not yet done so at the time of writing.
Jesse Powell, Kraken’s founder and former chief executive officer, previously stated that exchanges could increase transparency by disclosing financial liabilities as well as proof of reserves.
Nansen, a crypto analytics firm, says Binance has three times more crypto holdings than 11 other exchanges.
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