Binance introduces a proof-of-reserves system for Bitcoin holdings

November 26, 2022

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Binance, a cryptocurrency exchange, has launched a new website that explains its proof-of-reserves system. The company will begin with BTC reserves. Binance currently has a reserve ratio of 101%. It means that the company has enough bitcoins to cover the balances of all users.

This move comes just a few weeks after the demise of FTX, another popular cryptocurrency exchange. In the case of FTX, the company was experiencing a liquidity crisis. It ceased processing withdrawals due to inability to meet demand from investors and end users. Since then, crypto companies, particularly crypto exchanges, have attempted to be more transparent about user funds. It entails disclosing more details about hot and cold wallets. However, there is still a lot of work to be done before you can fully trust cryptocurrency exchanges and how they handle funds.

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