Connect with us

Crypto

Crypto Exchange Binance Reveals $69 Billion in Reserves

Right after FTX began to crumble, Binance stated that it has increased its SAFU insurance fund in light of recent events. The Secure Asset Fund for Users is an emergency fund that was established in 2018. Its purpose was to protect customers in extreme situations. The crypto-based fund was worth $1 billion at the beginning of the year. However, due to market conditions, the fund value dropped to $735 million.

Published

on

Binance is fully committed to transparency, according to CEO Changpeng Zhao (CZ). The largest crypto exchange has released details of its hot and cold wallet holdings as evidence of reserves in response to the FTX fiasco.

The exchange announced that it will publish cold wallet addresses and balances for its six weightiest coin holdings. The move comes in response to the fallout from the collapse of the FTX exchange this week. Over-indebtedness and a cascade of withdrawals were the downfalls of what was once the second-largest centralized exchange. Binance wants to assure its customers that the exchange has full reserves, he said. To that end, it said it is committed to transparency.

Read more about Binance and find other important news from the crypto sector and not only, with our companion app. Born2Invest’s team of journalists gathers the most interesting business news in a single mobile application. It’s impossible to keep up with everything you’re interested in, but our companion app will help you keep track of the important news. Our app is being updated throughout the day.

Over $40 billion in stablecoins

The Binance cold wallet for Bitcoin apparently contains 475,000 BTC. At current market value, this is equivalent to about USD 8 billion. Ethereum reserves amount to 4.8 million ETH, currently worth just under USD 6 billion. The cold wallet listing also revealed nearly USD 40 billion in stablecoins USDT, BUSD, and USDC. Binance is a giant when it comes to stablecoin reserves, holding a whopping 27% of all stablecoins in circulation.

In addition, the company said that it is working on creating a Merkle Tree reserve statement, which is expected to be released in the coming weeks. CZ claimed that all crypto exchanges should conduct proof-of-reserves. According to the Binance CEO, banks work with partial reserves. Crypto exchanges should not do so.

SEE ALSO  Transit, mobility projects to play vital role in economic recovery

Oracle vendor Chainlink has its own proof-of-reserve tools, which it recently touted. Chainlink PoR was launched in 2020, but there has never been a greater need than now. An immutable proof-of-reserve contract can be used to demonstrate that sufficient reserves are in place and have been independently verified. The goal is to increase customer confidence in the exchange or assets being invested in.

Increasing the insurance fund

Right after FTX began to crumble, Binance stated that it has increased its SAFU insurance fund in light of recent events. The Secure Asset Fund for Users is an emergency fund that was established in 2018. Its purpose was to protect customers in extreme situations.

The crypto-based fund was worth $1 billion at the beginning of the year. However, due to market conditions, the fund value dropped to $735 million. Binance has now restored the BUSD, BNB, and BTC-based funds to $1 billion.

__

(Featured image by Kanchanara via Unsplash)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in CRYPTO VALLEY JOURNAL, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.

Michael Jermaine Cards is a business executive and a financial journalist, with a focus on IT, innovation and transportation, as well as crypto and AI. He writes about robotics, automation, deep learning, multimodal transit, among others. He updates his readers on the latest market developments, tech and CBD stocks, and even the commodities industry. He does management consulting parallel to his writing, and has been based in Singapore for the past 15 years.