Binance is launching an interactive solvency test for its bitcoins


Basic facts:
  • The exchange solvency test currently only applies to BTC balances.

  • Binance allows users to see their BTC balances and whether they are accounted for.

Bitcoin (BTC) and cryptocurrency exchange Binance launched its liquidity test this Friday, November 25. In it, they claim to have covered all current debt with their users, and have more than 580,000 bitcoins in storage.

A official announcement Posted on Binance’s website, the platform announced the launch of a Proof of Reserve (PoR) system, which they describe as the “next step” in the company’s efforts “Providing transparency on consumer funds.”

In detail, this is an interactive system that demonstrates this Binance has reserved 582 thousand bitcoins on the chain, and the net balance of consumers amounts to 575 thousand. BTC. This means that, according to the data, Binance covers 100% of all debts owed to users.

The Binance stock revealed this Friday is slightly different from the company’s own November 10th. Then a company led by Chanpeng Zhao said it had about 475 thousand bitcoins are storedas reported by CryptoNoticias.

The Proof of Reserve system created by Binance also allows its users know how much BTC they have on the platform, as well as knowing whether they are taken into account when compiling the company’s accounts. This is done through a link available on the company’s website.

Binance explains that currently the system only applies to bitcoin balances. “More tokens and networks will be added in the coming weeks,” the platform explains.

They also clarified that they will involve “external auditors” under the proof of reserves system. which will analyze the results of the PoR.

Binance’s solvency test follows the crisis of FTX, its main competitor, crashed a couple of weeks ago, likely due to improper management of investors’ funds. Company declared bankruptcy on Friday, November 11.

As reported by CriptoNoticias, Sam Bankman-Fried, who was the CEO of FTX, was accused of using a client’s money to finance another company, Alameda Research.

It is also suspected that the FTX token, FTT, was used as collateral for subprime loanswhich led to a massive liquidation of the asset and subsequent decline in its market value.

Source: news.google.com

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