Binance, the popular crypto exchange, seems to have weathered the storm caused by the United States Department of Justice’s actions against the exchange and its co-founder, Changpeng Zhao. Despite the legal challenges, Binance’s assets under custody have soared to over $100 billion as of March 18.
This represents a significant increase from the $40 billion held at the start of the year, as stated by the exchange. Binance assures its users that their funds are held at a 1:1 ratio, with additional reserves that can be verified through its proof-of-reserves (POR) system. The recent surge in digital asset prices has played a crucial role in elevating the value of user assets under Binance’s custody.
Binance’s proof-of-reserves demonstrates collateralization ratios of over 100% for major cryptocurrencies and altcoins. However, experts caution that proofs-of-reserves only provide half the necessary information on reserves and do not account for an entity’s liabilities to calculate its net equity. Binance’s CEO, Richard Teng, asserts that the exchange has a debt-free capital structure.
In a surprising move, Binance announced on March 12 that it would sever ties with its venture capital arm, Binance Labs. Despite the notable success of Binance Labs, which has generated returns of over 14 times on invested projects, the exchange clarified that Binance Labs has no direct affiliation with the cryptocurrency exchange or any related entities.
In a related development, the dismissal of the Binance class-action lawsuit has been reversed by an appeals court.