Crypto: Binance Convert integrates two new tokens to support Terra

Investor confidence in the cryptocurrency industry has recently taken a hit. In question, FTX, a crypto exchange that suddenly stopped working. Yet he held client assets in the billions of dollars. Binance, the crypto exchange that handles the largest volume of transactions in the world, felt on a mission to fix it. To restore trust with investors, Binance will launch a system called Proof-of-Reserve (PoR). We explain how this new system works.

Binance announces the launch of Proof-of-Reserve.

Binance Proof-of-Reserve: The first contradictions

The Proof-of-Reserve system is supposed to reassure users about the safety and availability of funds held by the exchange. So when a client deposits 1 BTC for example, Binance also reserves at least 1 BTC. This parity between client assets and Binance’s reserve means that the exchange cannot collapse overnight. But already, Jesse Powell, CEO of Kraken, finds this initiative unnecessary. His words immediately sparked a kind of Kraken vs Binance war.

However, it was not only aimed at Binance. Indeed, after the collapse of FTX, many exchanges embarked on a frantic race to publish wallet addresses. The objective was to prove to their clients that their funds really exist. Binance just took the initiative one step further by creating a whole reserve. However, Powell would like to remind all such exchanges that without publishing client liabilities, a PoR is useless.

Let’s first recall that Kraken is a cryptocurrency exchange platform founded in 2011. In comparison, Binance was only launched in 2017. Secondly, the PoR that Kraken launched makes it possible to verify both the assets and the liabilities of clients. So, by requesting the publication of liabilities, Powell wants to prevent exchanges from cheating by publishing negative accounts as assets.

Binance Proof-of-Reserve: Importance and Future

Regardless of the criticisms, Binance CEO Changpeng Zhao alias “CZ” is determined to develop this project. At a minimum, it should be able to restore investor confidence and perhaps even create a bull market. Binance’s Proof-of-Reserve system will also allow investors to initiate an audit of their funds on their own. If it is massively adopted, we should see crypto platforms take on more responsibility. That is to say, they will no longer be able to dispose of client assets anyhow.

The concept is not yet perfect. Indeed, CZ has announced a partnership with audit companies to verify the reliability of its system. Currently only bitcoin is supported. But in the coming weeks, the CEO announces the integration of other cryptocurrencies. Binance announced on Twitter that priority will be given to ETH, USDT, USDC, BUSD and of course BNB.


The Binance’s Proof-of-Reserve starts with a good intention. At this time, customers need to know that their cryptocurrencies are well safeguarded. But CZ’s ambitions go beyond his business. For him, the size of it does not allow him to remain marble in the face of the fall of the crypto market. Binance has announced its firm intention to revive the sector. On this occasion, a fund of one billion dollars was announced.

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