Following the pandemonium that erupted with FTX this week, numerous exchanges and corporations have pledged openness and published the balances of their hot and cold wallets. Binance, the first to argue for this, announced that it had more than $70 billion in reserves.
Earlier in the week, Binance CEO, Changpeng “CZ” Zhao, announced that his exchange was to implement a Proof-of-Reserve mechanism to provide “full transparency” using Merkle Trees and emphasized the importance of transparency. In a show of good faith, Binance disclosed its hot and cold wallet balances in a recent blog post. according to what Binance published, the exchange holds $70,675,000,000 in its reserve. The exchange announced that it will share a full audited report soon, but did publish its major tokens on BTC, ETH, BNB, and TRX networks. The exchange holds roughly 475,000 BTC, 4,800,000 ETH, 17,600,000,000 BUSD, 601,000,000 USDC, and 58,000,000 BNB. Data from crypto analytics firm Nansen reveals that 32.99% of the exchange’s assets are in BUSD, 22.92% in USDT, 10.22% in ETH, 8.97 in BTC, 8.60% in BNB, and 16.29% in other tokens.
The enormous failure of FTX and its previous CEO, Sam Bankman-Fried, prompted Binance’s decision to expose the contents of its reserves (SBF). The uproar began when it was revealed that the majority of FTX’s sibling business, Alameda Research’s money were held in FTT. Concerns were raised about the exchange’s balance sheet, and CZ declared that it will liquidate its stake in FTT tokens. While this was going on, it caused a rise in withdrawals as more and more consumers sought to withdraw their funds from FTX, causing its stablecoin reserves to fall. The exchange then seemed to halt processing withdrawals, although SBF disputed this. Following that, Binance announced that it will buy FTX pending due diligence. Binance decided not to proceed with the deal after conducting an investigation into the firm’s finances and internal data. Following that, FTX announced that it had filed for Chapter 11 bankruptcy, and SBF resigned as CEO.
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