Binance, has ignited fervent discussions within the crypto sphere due to the dwindling status of its USDC reserves. This discourse intensified following a witty remark from the CEO of Coinbase during the company’s Q2 earnings briefing.

On August 1st, Binance released its latest proof-of-reserves (PoR). This provided a clear look at its cryptocurrency holdings. However, what drew significant notice was the change in its reserves of USD Coin (USDC) during the time when Silvergate faced difficulties. This situation led to many discussions on X (previously known as Twitter).

A Clear Look Into Binance PoR Cryptocurrency Holdings

The latest Binance PoR analysis shows their ability to protect its customer assets with a surplus of both cryptocurrencies and cash. A snapshot presented below reveals that Binance’s net balances to those of its clients surpasses 100% across all its assets.

Binance PoR Unveiled

Binance PoR emphasizes it’s strong financial position. However, what’s more prominent are the changes in its USDC reserves after the Silvergate situation. This is combined with the separation of the stablecoin, which becomes the main focus. Details from the PoR show that Binance’s USDC holdings went down from $3.4 billion on March 1 to a smaller $23.9 million by the start of May.

It was in September that Binance embarked on an internal conversion of its patrons’ USDC to Binance USD. Importantly, it should be noted that a significant amount of USDC remained in Binance’s possession at that time. Notably, a close examination of on-chain data shows that right after Silvergate’s crisis on March 12, Binance began converting its USDC holdings into Bitcoin (BTC).

Aleksandar Djakovic, an analyst who studies on-chain data, used Twitter to showcase that Binance obtained around 100,000 BTC and 550,000 ETH between March 12 and May 1. This amount is valued at about $3.5 billion and matches the extra amount of USDC that Binance had before.

Aleksandar Djakovic, showcase that Binance obtained around 100,000 BTC and 550,000 ETH between March 12 and May 1.

Binance’s USDC Reserves Revelation and Growing Demand for Transparent Proof-of-Reserves

The revelation about Binance’s USDC reserves is under close examination. This is linked to comments made by Coinbase CEO Brian Armstrong in the Q2 earnings discussion. Armstrong suggested that Binance swapped its USDC holdings for a different stablecoin.

Proof-of-reserves (PoRs) have transformed into a popular method for cryptocurrency exchanges to show their asset holdings and make this information public. This approach gained prominence after the FTX crypto exchange collapsed, sparking a demand for more transparency in the crypto community.

Despite the founders’ assurance of financial stability until November 2022, the downfall of FTX triggered stronger requests for openness.

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