In an aftermath of the FTX collapse, many crypto companies found themselves under increased pressure from users to implement a proof of reserves system. Binance’s CEO Changpeng “CZ” Zhao was the first to announce that his exchange would introduce the said system and called other exchanges to follow suit.
“Following our recent announcement outlining our commitment to transparency, Binance is releasing its Proof of Reserves (PoR) System, which is the next step in our effort to provide transparency on user funds,” the announcement reads. “The launch of this feature will start initially with BTC, with other tokens and networks being added in the next couple of weeks.”
Per the official statement, Binance also plans to invite third-party auditors to audit PoR results and to implement ZK-SNARKs that would improve PoR’s privacy and robustness and prove the total net balance (USD) of each user is non-negative.
According to a snapshot provided by Binance, the exchange currently holds 582,485 BTC in its reserves, while its users have a net balance of 575,742 BTC.