- Binance posted evidence of reserves to calm the FUD around it.
- It has withdrawn its application for a license in Abu Dhabi, but BNB’s price remains unaffected.
While the last few quarters have been fairly positive for the crypto market, with both blue chip coins and altcoins on the rise, there is one exchange that has been most negatively impacted: Binance.[BNB].
Increasing regulatory scrutiny, layoffs and other problems have plagued the stock market in recent months.
To respond to and mitigate this FUD, Binance recently published its proof of reserves.
Binance supports this with receipts
When referring to Proof of Reserves, it specifically refers to the assets held in custody by Binance for users. This shows evidence that Binance has funds to cover all user assets 1:1, along with additional reserves.
For every Bitcoin deposited by a user, Binance’s reserves increase by at least one Bitcoin, ensuring full coverage for customers’ funds. It is important to clarify that Binance’s corporate interests are maintained in a separate ledger.
In practical terms, this means that Binance maintains all user assets 1:1, with additional reserves. It had no debt in its capital structure. There is also an emergency fund (SAFU fund) for extreme situations.
On December 1, Binance issued its thirteenth reserve certificate, reflecting a month-over-month net inflow of $311 million. The user’s BTC assets amounted to 561,000, which represents a decrease of 4.05% (23,656 BTC).
ETH assets stood at 3.88 million, down 0.67%. USDT assets increased by 5.67% to reach 16.1 billion, corresponding to a growth of USDT 866 million.
Even though reserves on Binance have fallen, this report can help users gain confidence in the platform. Binance’s transparency allows users to maintain their holdings in Binance without any stress.
Another reason to be optimistic about Binance would be the fact that a volume increase was observed on the platform in November. If the trend continues into December, it could be a sign of healthy growth.
Source: Het Blok
Not all roses and sunshine
However, there were some signs of trouble facing Binance. It withdrew its pursuit of an investment management license in Abu Dhabi, deeming it unnecessary for the firm’s “global needs.”
However, the exchange maintains an application to provide digital asset custody to professional clients, as stated on its website.
Read Binance Coin (BNB) price prediction 2023-24
It remains to be seen how these factors will impact BNB in the long term. At the time of writing, BNB was trading at $235.30 and its price had risen 1.91% in the last 24 hours.
Source: Santiment