Binance's assets under custody exceed $100 billion despite U.S. Department of Justice actions. The exchange maintains 1:1 asset ratio and reports over 100% collateralization ratios.
Binance seems to have weathered a storm of U.S. Department of Justice actions against the exchange and its co-founder Changpeng Zhao remarkably well, as its assets under custody have soared past $100 billion as of March 18.
According to the latest announcement, the assets under custody for Binance users have more than doubled since the beginning of the year, now standing at over $100 billion. "We ensure all user funds are held at a 1:1 ratio, along with additional reserves, which can be verified using Binance's proof-of-reserves (POR) system," affirmed Binance staff. They also noted, "Recent weeks have seen a significant and sustained increase in digital asset prices, contributing substantially to the surge in user assets under Binance's custody."
Presently, Binance's proof-of-reserves indicates over 100% collateralization ratios for all major cryptocurrencies and altcoins. Despite this, experts caution that proof-of-reserves only provides partial information on reserves and does not account for an entity's liabilities when calculating net equity. Richard Teng, Binance's CEO, has asserted that the exchange operates on a "debt-free" capital structure. The exchange clarified:
"It's important to note that the figures provided by blockchain market intelligence firms, while helpful, may not perfectly represent the amount of user funds on Binance, as some of the assets included in such calculations are Binance's operational funds. The most accurate information on user asset holdings on Binance can be found in our monthly POR audits."
On March 12, Binance made headlines by announcing the severance of ties with its venture capital arm, Binance Labs, despite the latter boasting an average return of over 14 times on invested projects, with its portfolio now valued at $10 billion. Binance Labs staff clarified, "Binance Labs is permitted to use the Binance trademark but is otherwise independent from the Binance cryptocurrency exchange or any associated business or entity."