Binances Proof of Reserves: Lingering Doubts Despite 10 Issues

Binances Proof of Reserves: Lingering Doubts Despite 10 Issues

Binance’s Efforts to Rebuild Trust: Publishing Proof-of-Reserve Reports

Since the collapse of FTX in November 2022, digital 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 world’s largest cryptocurrency exchange, has been actively releasing PoR reports since November 2022. Nonetheless, regardless of the release of 10 reports, doubts regarding the exchange’s transparency and solvency still linger.

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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 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 firm’s obligations to its customers. Without this information, users and investors cannot assess the solvency of a firm.

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Additional concerns have arisen regarding Binance’s lack of transparency, fueled by recent legal troubles. In June 2023, the United States 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 cryptocurrency exchanges. Nonetheless, regardless of 10 reports, Binance’s PoR reports continue to raise questions about the exchange’s transparency and integrity.

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Daniel Lycon emerges as an intellectual polymath, gracefully merging the roles of crypto analyst, dedicated researcher, and editorial virtuoso. Navigating the intricate tapestry of digital currencies, Daniel’s keen insight resonates harmoniously with a diverse range of inquisitive minds. His adeptness at deciphering the most intricate threads of crypto intricacies flawlessly complements his editorial prowess, transforming complexity into an eloquent symphony of comprehension.

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