Crypto exchange Binance seems to have weathered the storm of recent actions taken by the U.S. Department of Justice against the exchange and its co-founder Changpeng Zhao. In fact, Binance’s assets under custody have surpassed $100 billion as of March 18, according to an announcement.
This represents a significant increase from the $40 billion in assets under custody at the beginning of the year. Binance staff emphasized that they hold all user funds at a 1:1 ratio, along with additional reserves, which can be verified using Binance’s proof-of-reserves (POR) system. They also noted that the recent surge in digital asset prices has played a role in elevating the value of user assets under Binance’s custody.
Binance’s proof-of-reserves currently indicates over 100% collateralization ratios for major cryptocurrencies and altcoins. However, experts have cautioned that proof-of-reserves only provides partial information on reserves and does not account for an entity’s liabilities in calculating its net equity. Binance CEO Richard Teng has asserted that the exchange’s capital structure is “debt-free.”
In a separate development, Binance announced on March 12 that it would sever ties with its venture capital arm, Binance Labs, despite the latter’s impressive track record. Binance Labs has seen an average return on invested projects of over 14 times and its portfolio is now valued at $10 billion. Binance clarified that Binance Labs is licensed to use its trademark but has no other relationship with the cryptocurrency exchange or any affiliated business or entity.
In related news, a class-action lawsuit against Binance that was previously dismissed has been revived by an appeals court.