Binance’s Efforts to Rebuild Trust: Publishing Proof-of-Reserve Reports
Since the collapse of FTX in November 2022, cryptocurrency exchanges have been striving to enhance transparency and regain trust. One way they are doing this is by regularly publishing Proof-of-Reserve (PoR) reports. Binance, the world’s largest crypto exchange, has been actively releasing PoR reports since November 2022. However, despite the release of ten reports, doubts regarding the exchange’s transparency and solvency still linger.
Binance Releases its Tenth PoR Report
Binance has recently published its tenth PoR report, affirming the accuracy of the presented data as of Friday, September 1. This report utilizes a combination of a Merkle Tree and zk-SNARKs to enable users to view and verify their balances on the exchange.
The inclusion of proof of liabilities in PoR reports is crucial as it discloses the firm’s obligations to its customers. Without this information, users and investors cannot assess the solvency of a firm.
Additional concerns have arisen regarding Binance’s lack of transparency, fueled by recent legal troubles. In June 2023, the U.S. SEC filed 13 charges against the exchange, alleging the routine commingling of customer funds.
Hot Take: Binance’s PoR Reports Fall Short in Rebuilding User Trust
Proof-of-Reserve reports are designed to rebuild trust in crypto exchanges. However, despite ten reports, Binance’s PoR reports continue to raise questions about the exchange’s transparency and integrity.
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