Binance revealed that there is a thing called a "proof-of-reserves" system in its company, and it serves as an assurance to the public regarding the assets it holds for all users trading in its platform. It comes after FTX's recent crash and bankruptcy, one that left the public seeing conflict for withdrawing funds they put into the company's accounts to hold.
The new system is a way for the public to know where their funds are and where are they stored, centering on transparency for users regarding their funds and holdings.
Binance Shares Proof-of-Reserves Systems for Bitcoin
(Photo : Kanchanara from Unsplash)
Binance announced via a press release that it has a new system that reflects its digital assets regarding the top crypto in the world, Bitcoin. The company detailed in this post that it has enough coins for all users, with a massive reserve ratio of 101 percent, with Binance having funds that can cover all of the user's assets in a 1:1 ratio.
These assets are what Binance holds for users, the same money which people keep in their Binance accounts to invest in the cryptocurrency market and trade with others.
For now, Binance started with Bitcoin reserves, but it will ensure that other coins, particularly the top-grossing ones, will also have this security with people's assets.
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Binance Assures BTC Assets Are Enough for All
Binance assures the world that it has enough assets, centering on Bitcoin at the moment, should there come a problem in the future. FTX has not yet been able to allow withdrawals to user funds as of the moment, one that Binance aims to avoid should the time come.
Moreover, Binance's effort towards transparency in its service is growing, with the recent proof-of-reserves systems among its latest offer.
Cryptocurrency and its State Now
The world is not yet seeing the massive turnover for the cryptocurrency industry which they are hoping for since the start of the year, and 2022 is almost over, with the industry still seeing a critical state. Companies like Genesis Global is already indebted to continue their operations for the world, with its parent, the Digital Currency Group hanging by a thread.
On the other hand, FTX's recent bankruptcy issue is a massive indication regarding the industry's money, particularly in losing more than it earns in this standoff in the industry.
Crypto coins are plummeting now and have not yet broken out of their slump for the longest time now, with its best seeing it maintain the prices they have on the platforms. The industry is struggling and the top coin, Bitcoin, is also seeing a significant problem in its market price and graphs, with the decline gravely affecting the entire industry.
Still, Binance assures the public with its proof-of-reserves system that aims to reflect the company's BTC holdings, especially with how the market situation is right now. The company claims that it has a 101 percent reserve ratio for Bitcoin, something which provides security to investors and traders in the cryptocurrency market.
Related Article: FTX Reveals 8 Percent of Customers Come From Mainland China Amidst Beijing Crypto Ban
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Written by Isaiah Richard
