March 27, 2024
Latest Cryptocurrency News

Binance Hits $100B in Assets Amid Regulation

The cryptocurrency exchange Binance has shown incredible resiliency in the face of increased attention from the US Department of Justice (DOJ) and ongoing legal actions; as of March 18, assets under custody had surpassed $100 billion.

Steady Growth Amid Regulatory Pressure

According to recent disclosures, the assets under custody of Binance users have increased significantly, more than doubling from $40 billion at the start of the year. The exchange credits the recent steady increase in the price of digital assets in part for this spike.

“We hold all user funds at a 1:1 ratio, plus additional reserves, which anyone can verify using Binance’s proof-of-reserves (POR) system.”

Statement from Binance staff

The proof-of-reserves currently display over 100% collateralization ratios for major cryptocurrencies and altcoins.

Transparency Amidst Concerns

While Binance emphasizes its transparency through the proof-of-reserves system, experts caution that this only provides a partial view of the exchange’s financial health. It doesn’t consider liabilities, crucial for calculating net equity.

Richard Teng, CEO of Binance, has asserted that the exchange is “debt-free,” aiming to allay concerns regarding its financial stability. Binance also clarifies that figures provided by market intelligence firms may not accurately represent user funds due to the inclusion of Binance’s operational funds.

Strategic Moves Amidst Uncertainty

On March 12, Binance made the unexpected announcement that its relationship with its venture capital division, Binance Labs, would be ending. The exchange decided to cut ties despite Binance Labs’ remarkable track record, which includes an average return on investment projects of over 14 times with a $10 billion portfolio.

“Binance Labs is licensed by Binance to use its trademark but otherwise has no other relationship with the Binance cryptocurrency exchange or any affiliated business or entity,”

Statement from Binance staff

As regulatory pressures continue to mount, Binance’s ability to adapt strategically while maintaining its market dominance remains a focal point for observers in the cryptocurrency space.

Image by jcomp on Freepik

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