In a recent development, despite facing significant legal challenges from the US Department of Justice, Binance has managed to maintain a strong financial stance. The cryptocurrency exchange, following the departure of its former CEO Changpeng Zhao, reported a substantial increase in its assets under management (AUM), crossing the $100 billion threshold.
Growth in User Holdings
The growth represents an impressive surge of over $40 billion since the year’s start. Binance attributes this growth to the rising value of digital assets and a robust internal system, assuring users that their funds are backed one-to-one with transparent reserves. This assertion is supported by the exchange’s publicly accessible Proof of Reserves (POR) system, which shows full collateralization for all major cryptocurrencies and altcoins.
Despite this positive report, some experts have expressed concerns, pointing out that Binance’s POR only offers a limited view of the company’s financial health by not accounting for all liabilities when determining net equity.
CEO’s Confidence in Binance’s Stability
Richard Teng, Binance’s current CEO, has reassured the market of the exchange’s stability, highlighting its debt-free status during the period in question. He emphasized that the most precise evaluation of user funds comes from monthly Proof of Reserves audits rather than external estimates, which may include Binance’s operational assets.
Furthermore, Binance announced its decision to part ways with Binance Labs, its venture capital and incubator arm. Despite Binance Labs having a portfolio currently valued at $10 billion and seeing substantial returns on its investments, the firm clarified that it operates independently, merely sharing Binance’s brand name with no further association to the exchange or any related entities.