CryptoQuant's Audit of Binance Reveals No 'FTX-Like' Behavior in Proof-of-Reserves

cryptonews.com:

An on-chain audit of Binance by the blockchain analytics firm CryptoQuant has concluded that Binance’s reserves of bitcoin (BTC) and other major coins “are not showing ‘FTX-like’ behavior at this point.”

In analyzing the numbers, CryptoQuant said it compared Binance’s BTC liabilities, as stated in the exchange’s recent proof-of-reserves report to how much BTC on-chain data shows that Binance holds.

“We found that Binance's reported liabilities are very close to what we thought they would be (99%),” the firm wrote.

The comments from the on-chain analytics firm came in a Twitter thread on Friday.

CryptoQuant added that Binance’s own token, BNB, does not represent a larger share of total exchange reserves than what is common at other major exchanges.

The “clean reserves” metric, which represents the share of reserves not made up of the exchange's own token, stands at “around 90%,” the firm wrote.

In conclusion, CryptoQuant said that on-chain data shows that Binance has been honest about its assets and liabilities in BTC terms.

“Our analysis should not be interpreted as a favorable opinion of Binance as a company or the BSC/BNB networks. Our data merely shows that the amount of BTC Binance says it holds as liabilities at the moment the [proof-of-reserves] report was conducted matches our reserve data,” the firm said.

The on-chain audit came as news broke that auditing firm Mazars, which was the firm behind Binance’s recent proof-of-reserves report, now says it will not work with clients in the crypto industry.

“Mazars has indicated that they will temporarily pause their work with all of their crypto clients globally, which include Crypto.com, KuCoin, and Binance. Unfortunately, this means that we will not be able to work with Mazars