Binance Surpasses $100B in User Asset Custody

Crypto exchange Binance seems to have weathered the storm of recent actions by the US Department of Justice against the exchange and its co-founder, Changpeng Zhao. As of March 18, Binance’s assets under custody have surpassed $100 billion, more than doubling from $40 billion at the start of the year. Binance staff emphasized that they hold all user funds at a 1:1 ratio, with additional reserves that can be verified using their proof-of-reserves (POR) system. The increase in digital asset prices has played a significant role in elevating the value of user assets under Binance’s custody.

Binance’s proof-of-reserves currently shows collateralization ratios over 100% for major cryptocurrencies and altcoins. Experts caution that this only reveals half the relevant information on reserves and does not consider a company’s liabilities to calculate its net equity. Despite this, Binance CEO Richard Teng has claimed that the exchange’s capital structure is “debt-free.”

Binance clarified that the figures provided by blockchain market intelligence firms are not a perfect reflection of user funds on the platform, as some assets included in the calculations are Binance’s operational funds. The exchange urged users to rely on their monthly POR audits for the most accurate information on user asset holdings.

In a surprising move, Binance announced on March 12 that it would sever ties with its venture capital arm, Binance Labs. Despite Binance Labs’ impressive track record of averaging over 14 times return on invested projects and its portfolio now valued at $10 billion, the exchange stated that Binance Labs has no affiliation with the Binance cryptocurrency exchange or any related business or entity, aside from being licensed to use its trademark.