Crypto exchange Binance seems to have remained largely unaffected by the recent actions taken by the United States Department of Justice against the exchange and its co-founder Changpeng Zhao. In fact, its assets under custody have surpassed $100 billion as of March 18, doubling from $40 billion at the start of the year.
Binance assures its users that their funds are held at a 1:1 ratio, with additional reserves that can be verified through its proof-of-reserves (POR) system. The surge in digital asset prices in recent weeks has contributed to the increase in the value of user assets under Binance’s custody.
The proof-of-reserves currently demonstrate over 100% collateralization ratios for major cryptocurrencies and altcoins. However, experts caution that proofs-of-reserves only provide half of the necessary information on reserves and do not consider an entity’s liabilities in calculating its net equity. Binance CEO Richard Teng has countered these concerns by claiming that the exchange’s capital structure is debt-free.
On March 12, Binance announced its decision to sever ties with its venture capital arm, Binance Labs. Despite Binance Labs consistently achieving returns of over 14x on its invested projects and having a portfolio now valued at $10 billion, the exchange clarified that Binance Labs is only licensed to use its trademark and has no other relationship with the cryptocurrency exchange or any affiliated business or entity.
In related news, the dismissal of the Binance class-action lawsuit has been reversed by an appeals court.