Binance, the top cryptocurrency exchange by trading volume, may be “tremendously well capitalized,” but that its financials are still “very much a black box,” said an analyst at data insights company Nansen.
Andrew Thurman said although the exchange has published that it holds $55 billion in customer deposits on-chain, “aside from that, we don’t have much on-chain or any kind of financial access or transparency into their entities.”
Still, Thurman said, despite Binance being one of the first exchanges to issue a proof of reserves, via a report that has since been removed by its auditor Mazars, on top of being well-capitalized after the collapse of FTX it is difficult to pinpoint the exchange’s financial health. “In short, you can’t” tell whether users can see the exchange’s liabilities against its supposed $55 billion in assets, Thurman said. “Proof of reserves doesn’t give you the full picture. It’s not a full audit,” Thurman said.
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