Binance is the world’s largest crypto exchange.
Its founder, CZ, played a big role in taking down FTX and exposing Sam Bankman-Fried (SBF) for his fraud. But Binance is similar to FTX — a centralized crypto exchange in a crypto-friendly country (Dubai) with its own token.
The problem with FTX was that the assets users “owned” weren’t actually there.
- So users began questioning the safety of holding their assets inside Binance and other exchanges.
- In response, several exchanges released “proof of reserves” — an auditing procedure that verifies an exchange’s holdings.
Yesterday, global auditing firm Mazars (one that isn’t in the metaverse) released a report detailing Binance’s proof of reserves.
Mazars’ verdict: Binance has enough bitcoins to cover user balances. Assets > liabilities.
The problem: It’s not an official audit and isn’t thoroughly verified — per Francine McKenna, Lecturer in financial accounting at Wharton (YF!).
There’s nothing safer than holding your crypto outside of exchanges in your own crypto wallets.
