Binance took another step in its effort to bring transparency to user funds, following the recent Disclosure of Binance Hot and Cold Wallet Addresses. This latest update shows Proof of Funds for BTC and an update using the Merkle Tree mechanism for users to verify BTC reserves.
“This is the first iteration of the feature and we will be making tests available soon for ETH, USDT, USDC, BUSD and BNB. Binance is also working to integrate an independent third-party auditor to validate the Merkle tree data.“said Changpeng Zhao, known as ‘CZ’, CEO and Founder of Binance.
“Given recent events, it is understandable that the community is demanding more from cryptocurrency exchanges, far more than is currently required from traditional financial institutions. That is why we are happy to offer this latest feature for our users to verify their funds.C.Z. said.
“As Binance’s user community is exponentially larger than that of the second largest exchange, this is a huge initiative and it will take us a few weeks to prepare the data for most of our custodial assets. We are working to release the next update as soon as possible and meet the expectations of the community”, he added.
Proof of Reserves
The new Proof of Reserves website is designed to show that Binance, as custodian, holds client funds in full, with reserves. In simple terms, When a user deposits a Bitcoin, Binance’s reserves increase by at least one Bitcoin to ensure that client funds are fully insured.
People will be able to check the website and view the Binance Reserve Proof, which shows the Binance reserve ratio along with client responsibilities.
Two ways to verify funds
The site is also offering two new ways for people to easily verify their transactions on Binance’s Merkle Tree.. In the first option, people can verify their funds through the Binance website.where you can find your BTC funds against the Binance Merkle Tree by following a few simple steps.
After logging into the Binance website, click on “wallet”, then “audit” and this will generate a unique registration ID that confirms that the assets are covered and also confirms the asset balance of the users at the time of the audit.
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