Crypto exchange Binance has shown resilience in the face of multiple actions taken by the U.S. Department of Justice against the exchange and its co-founder Changpeng Zhao. Its assets under custody have reached over $100 billion as of March 18, 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 through Binance’s proof-of-reserves system. The recent surge in digital asset prices has contributed to the increased value of user assets under Binance’s custody.
Binance’s proof-of-reserves currently indicate collateralization ratios above 100% for major cryptocurrencies and altcoins. However, experts have cautioned that proof-of-reserves only provides half the necessary information on reserves and excludes an entity’s liabilities to calculate its net equity. Binance CEO Richard Teng has asserted that the exchange is “debt-free” in terms of its capital structure.
In a separate development, Binance announced on March 12 that it would sever ties with its venture capital arm, Binance Labs, despite the latter’s impressive average return on invested projects of over 14 times and a current portfolio worth $10 billion. Binance staff clarified that Binance Labs is authorized to use the Binance trademark but has no other affiliation with the cryptocurrency exchange or any affiliated business or entity.
In related news, the dismissal of a class-action lawsuit against Binance has been overturned by an appeals court.
Binance's custody of user assets exceeds $100 billion.