CryptoQuant gives Binance clean bill of health

After suffering a huge amount of negative press over its recent proof-of-reserves audit, blockchain analytics provider CryptoQuant has verified that all Binance’s reserves are accounted for. 

The cryptocurrency market has been roiled over the past few days by FUD suggesting that this and that crypto platform is about to go down. Binance, being the biggest trading platform in the sector, has become the number one target for most of the FUD.

The Binance proof-of-reserves report put together by Mazars did confirm that Binance’s bitcoin reserves were overcollateralised. However, after the report was criticised by certain industry experts, Mazars started to distance itself from the report and now the link to it is dead and not available.

The problem appears to have been that the report was not a proper audit given that it was an “agreed-upon procedure” rather than a full audit that used a process imposed by the auditor themselves.

However, CryptoQuant carried out its own analysis of Binance and it found that the exchange was now the biggest in the sector with 30% of its reserves in BTC. Coinbase took second place with 26% of reserves in BTC.

Source: CryptoQuant

One of the key messages in the CryptoQuant report was that the Binance-reported liabilities were very similar to CryptoQuant’s own estimation:

"In order to assess the data in Binance’s Proof-of-Reserves report, we compared Binance liabilities expressed in the report to CryptoQuant’s on-chain metric Binance BTC Reserve data (our estimate of Binance’s customers’ deposits). We found out that the liabilities reported by Binance are very close to our estimation (99%)."

The report concluded that Binance’s ETH and stablecoin reserves were “not showing FTX-like behaviour”, and it stated that the BNB exchange coin was not a large percentage of reserves.

“Binance has an acceptable "Clean Reserve,” which means its own token, BNB, is still a low proportion of its total assets.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.