Binanceโs Efforts to Rebuild Trust: Publishing Proof-of-Reserve Reports
Since the collapse of FTX in November 2022, digitalย currency exchanges have been striving to strengthen transparency and regain trust. One way they are doing this is by regularly publishing Proof-of-Reserve (PoR) reports. Binance, the worldโs largest cryptocurrency exchange, has been actively releasing PoR reports since November 2022. Nonetheless, regardlessย of the release of 10 reports, doubts regarding the exchangeโs 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 aย mix 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 critical as it discloses the firmโs obligations to its customers. Without this information, users and investors cannot assess the solvency of a firm.
Additional concerns have arisen regarding Binanceโs lack of transparency, fueled by recent legal troubles. In June 2023, the Unitedย States SEC filed 13 charges against the exchange, alleging the routine commingling of customer funds.
Hot Take: Binanceโs PoR Reports Fall Short in Rebuilding User Trust
Proof-of-Reserve reports are designed to rebuild trust in cryptocurrency exchanges. Nonetheless, regardlessย of 10 reports, Binanceโs PoR reports continue to raise questions about the exchangeโs transparency and integrity.
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