Binance releases proof of bitcoin reserves, ups recovery fund to $2 billion
Binance, a cryptocurrency exchange, released the long-awaited Proof-of-Reserves bitcoin on Friday. Changpeng Zhao, CEO of Binance, also stated that their industry recovery fund now exceeds $2 billion.
Binance shared an early Friday morning snapshot of the users’ combined account balances and their bitcoin reserves. Binance’s documentation shows that users have a net balance in their accounts of 575742 bitcoin. Binance, on the other hand, has reserves of 582 485 bitcoin. This gives Binance a surplus of 6743 bitcoin. Binance users can also verify their bitcoins on the exchange by sharing a link with them.
Since the collapse of FTX earlier in the month, crypto markets have been extremely concerned about the liquidity and quality of cryptocurrency exchanges’ reserves. After swapping high-value liquid crypto for its tokens, FTX had virtually no bitcoin left in its reserves. This was after users lost faith in the exchange and it became illiquid.
Binance’s 1:1 ratio of users bitcoins to its own bitcoin reserves is an attempt at reassuring markets that it holds its users assets in the same tokens they have deposited. It also forces rival exchanges to prove their bitcoin holdings are not on paper but on-chain.
According to the company, they will be adding more crypto assets to their proof of-reserves system over the next few weeks and will hire independent auditors to verify all claims.
Zhao also declared Friday that Binance now holds $2 billion in their Industry Recovery Initiative, (IRI), it said. This will help legitimate players in crypto recover from the damage done by the implosion FTX.
Yesterday, #Binance donated ANOTHER $1 million to the industry recovery initiative. All in USD.
CZ Binance (@cz_binance). November 25, 2022
He stated that over 150 projects and companies have submitted applications for assistance to the recovery fund.
He wrote that Binance might be interested in buying some of the failing crypto projects, which were previously owned or supported by FTX.
Zhao stated that they would be interested in examining those assets. They invested in many different projects. Some of them were OK, others were bad. However, I believe there are some assets that could be salvageable. When they are available, we’ll review them.
Zhao was clear about the types of companies that could receive funding assistance when the IRI was announced. Zhao wrote that fraud and lies do not qualify for funding assistance. This is for other projects within the ecosystem.
Binance originally committed $1 billion. The fund has now doubled in size over the past ten days.
Zhao explained to Bloomberg that the fund would be visible publicly on the blockchain and have a flexible structure. Zhao stated that the IRI was not an investment fund, but a co-investment opportunity for organizations looking to support Web3.
He stated that the IRI will run for six months and anyone who contributes would be eligible to withdraw any funds left over at the end.
