Binance CEO Zhao Changpeng spoke up about the large number of withdrawals on the cryptocurrency exchange platform. According to him now his condition is stable.
On December 14, there was a withdrawal of USD 1.9 billion in ethereum tokens in 24 hours. This massive withdrawal caused anxiety from investors for fear that the crypto industry would collapse.
However, according to CZ, Zhao's call, his condition is now stable and many investors have returned to deposit their funds. According to Binance there were USD 1.14 trillion of funds withdrawn in 12 hours and this was easily handled, because their business model is only "holding assets and generating income from transaction fees".
This is different from FTX, which collapsed and its founder was recently arrested, because Binance's rivals lent funds from consumers to trading company Alameda Research, we were quoted as saying by SCMP.
Then Binance also assured investors that the crypto asset reserves stored on the platform are fully guaranteed. This data comes from an audit conducted by Mazars, which says Binance has control of more than 575,742.42 Bitcoin of its customers, which is worth $9.7 billion at the time of publication of this article. Mazars stated that "Binance has 101% guarantee."
The audit includes several accounts, one of which is spot accounts owned by Binance customers. Apart from the Bitcoin network, wrapped BTC on Ethereum, BNB Chain and BNB Smart Chain were also included in the audit.
As part of its proof-of-reserves pledge, Binance submitted a request for agreed-upon procedures (AUP), or limited-scale audits, on November 22.
As disclosed in its procedures, Mazars independently derives the face value of Binance customer assets by testing various wallet addresses controlled by Binance. The auditor requests Binance to transfer the assets to the specified address and return them to verify proof of ownership.
In addition, the company uses its software to aggregate the client data it obtains and calculates the Merkle Root Hash of the client data. This allows Binance clients to independently and cryptographically verify their Merkle Leaf as part of the Merkle Root.