According to an announcement on March 7, cryptocurrency exchange Binance has added an additional 11 tokens to its proof-of-reserves (PoR) report. These include Mask Network (MASK), Enjin Coin, WazirX (WRX), The Graph (GRT), Chromia (CHR), Curve DAO Token (CRV), 1inch Network (1INCH), PowerPool (CVP), Hashflow (HFT), SSV.network (SSV) and Dogecoin. With the latest update, Binance said it now has over $63 billion across 24 assets in its proof-of-reserves (PoR) system. The largest assets on the exchange include Bitcoin, 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 FTX’s collapse, experts have repeatedly warned users of the limitations of such methodology. These include a lack of information on the 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 February 2023, the exchange made a major update to its PoR system, implementing ZK-SNARKs, which Binance said would “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.