According to an announcement on Mar. 7, cryptocurrency exchange Binance has added an additional 11 tokens to its proof-of-reserves (PoR) report. These include MASK, ENJ, WRX, GRT, CHR, CRV, 1INCH, CVP, HFT, SSV, and DOGE. With the latest update, Binance says it now has over $63 billion across 24 assets in its proof-of-reserves system. The largest assets on the exchange include Bitcoin (BTC), Ethereum (ETH), and Tether (USDT), with $12.7 billion, $7.1 billion, and $16.3 billion in net customer balances, respectively.
Although exchanges have begun adopting the PoR method for greater transparency in the wake of cryptocurrency exchange FTX’s collapse, experts have repeatedly warned users of the limitations of such methodology. These include lack of information on use of leverage, collateralization, and corresponding proof-of-liabilities and cannot be revealed unless accompanying financial statements supplement the PoR.
As told by Binance, its PoR “uses Merkle trees to add up on-chain data, so that users can rest easy knowing that their assets are held for them 1:1 in our custody.” In Feb. 2023, the exchange made a major update to its PoR system, implementing zk-SNARKs, which Binance says will ” increase the privacy and security of user data during the verification process.”
Cointelegraph previously reported on Dec. 16, 2022, that South African auditor Mazars removed Binance’s PoR audit from its website and ceased such services for crypto exchanges altogether. The firm previously said on Dec. 7 that Binance’s Bitcoin and cross-chain Bitcoin assets were “fully collateralized.” at the time. However, Mazars’ also stated that its methods were based on “agreed-upon procedures” (AUP) and did not constitute a financial audit. The AUP was also limited in scope as it did not investigate other tokens.
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