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Binance adds 11 tokens to PoR, claims $63B in reserves

March 7, 2023 Coin Telegraph

Binance adds 11 tokens to PoR, claims B in reserves

The results have not been audited by any accounting firms.

According to an announcement on Mar. 7, cryptocurrency exchange Binance has added an additional 11 tokens to its proof-of-reserves (PoR) report. These include MASK, ENJ, WRX, GRT, CHR, CRV, 1INCH, CVP, HFT, SSV, and DOGE. With the latest update, Binance says it now has over $63 billion across 24 assets in its proof-of-reserves system. The largest assets on the exchange include Bitcoin (BTC), Ethereum (ETH), and Tether (USDT), with $12.7 billion, $7.1 billion, and $16.3 billion in net customer balances, respectively.

Although exchanges have begun adopting the PoR method for greater transparency in the wake of cryptocurrency exchange FTX's collapse, experts have repeatedly warned users of the limitations of such methodology. These include lack of information on use of leverage, collateralization, and corresponding proof-of-liabilities and cannot be revealed unless accompanying financial statements supplement the PoR.

As told by Binance, its PoR "uses Merkle trees to add up on-chain data, so that users can rest easy knowing that their assets are held for them 1:1 in our custody." In Feb. 2023, the exchange made a major update to its PoR system, implementing zk-SNARKs, which Binance says will " increase the privacy and security of user data during the verification process."

Cointelegraph previously reported on Dec. 16, 2022, that South African auditor Mazars removed Binance's PoR audit from its website and ceased such services for crypto exchanges altogether. The firm previously said on Dec. 7 that Binance's Bitcoin and cross-chain Bitcoin assets were "fully collateralized." at the time. However, Mazars' also stated that its methods were based on "agreed-upon procedures" (AUP) and did not constitute a financial audit. The AUP was also limited in scope as it did not investigate other tokens.

Our Proof-of-Reserves just got an update.

We have now increased the number of tokens we cover by 11, to a total of 24.

Find out more about our Proof-of-Reserves and this recent update with the blog below.https://t.co/4kKWhkNK3q
— Binance (@binance) March 7, 2023

MEXC Global publishes proof of reserves after month long testing

February 23, 2023 Coin Telegraph

Coin Telegraph

The report showed high reserve ratios for USDT, USDC, BTC, and ETH.

On Feb. 22, cryptocurrency exchange MEXC Global released its proof-of-reserves (PoR) snapshot after 45 days of testing. In a document seen by Cointelegraph, MEXC claimed its reserve ratios for Tether (USDT), USD Coin (USDC), Bitcoin (BTC), and Ethereum (ETH) were 120.70%, 240.18%, 116.50%, and 110.53%, respectively via the Merke Tree method.

As of the date of snapshot on Feb. 10, MEXC held 232.4 million USDT, 33.0 million USDC, 1,869.0 BTC, and 12,472.0 ETH in custodied user assets. Meanwhile, the total assets held within MEXC wallets for the four coins were 280.6 USDT, 79.4 million USDC, 2177.5 BTC, and 13,785.6 ETH, respectively. A spokesperson for MEXC told Cointelegraph:

"MEXC will provide monthly updates on users' asset data through the Merkle Tree. This Proof considers strong Proof that our users' assets are available for 1:1 redemption at any time. As the industry becomes more regulated, we may disclose additional data that our users need. "

The spokesperson said that the exchange also plans to establish a "MEXC Investor Protection Fund" on top of existing measures to safeguard users' assets. Prior to the announcement, MEXC published a list of wallet addresses belonging to the exchange. When asked about regulation, the spokesperson explained that MEXC had obtained Money Service Business licenses in the U.S., Canada, Switzerland, and Estonia and that "clear regulatory standards are so important for the entire industry."

While exchanges have welcomed the PoR method as a gauge of financial health, other experts disagree. Jack Graves, a teaching professor of law at Syracuse University, cautioned investors that PoRs do not reveal other key information such as liabilities and leverage. "You can audit how many assets a crypto exchange has on-chain, but how much of it is pledged as collateral? That's a lot harder to figure out unless you have access to their financial services, books, and records, […]," he explained.

PoR