Binance has been heavily scrutinized since it revealed its proof of reserves around a month ago. The cryptocurrency exchange took these efforts to convince consumers that all deposited funds were safe and unlikely to collapse like FTX, but the outcomes were terrible for the firm.
As the FUD spread, more than $6 billion was taken off the exchange in a couple of days. Binance has now stepped in to address the community’s most urgent concerns. In a blog post published on its website on Friday, the crypto exchange answered the most commonly asked questions from the community during the previous two weeks. One of these concerns was whether the exchange had sufficient cash to back up all deposit deposits.
Binance claims that user assets on the cryptocurrency exchange are backed at a 1:1 ratio, allowing them to withdraw their currencies anytime. The corporation said that user and corporate funds are never mingled. As per Binance the assets maintained by users and those held by the company are completely distinct, and the capital reserves are adequate to cover both regular business operations and difficult times.
Binance is Debt Free
The cryptocurrency exchange stated that it was not financed by debt. According to the report, Binance derives money from transaction fees on its platform and investment returns made via Binance Labs, its investing and acquisitions arm. Binance Labs, according to sources, controls $7.5 billion in capital and has witnessed excellent 2,100% investment returns from the over 200 projects it has sponsored since 2018.