Binance Has Enough BTC To Cover Customer Deposits, Bitcoin Reserves Are Fully Collateralized, Says Auditing Firm Mazars

Cryptocurrency exchange Binance BNB/USD has 101% collateralization of its Bitcoin BTC/USD holdings, according to a report by the auditing firm Mazars. This means that Binance has more than enough BTC to cover customer deposits.

According to a recent report by Mazars, as of November 22 at midnight UTC, the largest cryptocurrency exchange in the world had a 101% collateralization ratio of 575,742 BTC in net customer deposits.

What Happened

In the report containing Binance's proof-of-reserves and proof-of-liabilities verification, Mazars noted, "at the time of assessment, Mazars observed Binance controlled in-scope assets in excess of 100% of their total platform liabilities."

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Notably, the collateralization report's value matches the one given by Binance in its initial proof-of-reserves report from late last month.

Why It Matters

After crypto exchange FTX declared bankruptcy last month, which led to widespread anxiety among the crypto community, Binance disclosed some preliminary information relating to its reserves.

According to Mazars, they conducted an Agreed-Upon Procedures (“AUP”) engagement, which means “performing the procedures that have been agreed with Binance, and reporting the findings.”

No Assured Conclusion, Says Mazars

“The AUP engagement is not an assurance engagement. Accordingly, we do not express an opinion or an assurance conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported,” Mazars stated.

A Proof-of-Reserves (PoR) is an independent check carried out by third parties on centralized crypto exchanges.

The objective is to confirm that the platforms indeed possess the assets claimed by them.

One of the first crypto industry leaders to promote providing proof-of-reserves in an effort to increase transparency was Binance CEO, Changpeng Zhao.

"All crypto exchanges should do Merkle-tree proof-of-reserves. Banks run on fractional reserves. Crypto exchanges should not," Zhao said on November 9.

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