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Binance Proof of Reserves Sparks Debate: No Ethereum or Solana in $110B Holdings?
How does a cryptocurrency exchange prove it actually has the billions of dollars it claims to hold? This question became essential after the FTX collapse, when users discovered their funds weren’t as secure as promised.
Binance, the world’s largest crypto exchange, addresses this concern through Proof of Reserves (PoR), a cryptographic method using Merkle Tree technology to verify asset holdings without exposing sensitive user data.
The exchange publishes regular PoR reports, with the 31st report showing user asset holdings as of June 1, 2025. These reports demonstrate that Binance maintains over 100% backing for major cryptocurrencies including Bitcoin, Ethereum, USDT, and BNB. The coverage ratio above 100% means user funds are fully backed with extra cushion. Think of it like a bank showing it has $110 for every $100 deposited.
Through public wallet addresses and Merkle Root Hash verification, users can independently confirm their holdings exist on-chain. This transparency mechanism allows Binance to prove solvency without revealing individual account details. The company also maintains the SAFU fund for emergency situations and operates with zero debt, keeping corporate holdings on separate ledgers from user funds.
However, recent debates have emerged regarding Binance’s reported $110 billion in holdings. Some stakeholders question why certain major assets like Ethereum or Solana appear excluded from specific reports, despite Binance confirming full backing for ETH. This confusion highlights the complexity of PoR reporting and the need for clearer communication about which assets are included in different tallies.
The post-FTX crypto landscape has made PoR a survival standard rather than a nice-to-have feature. Users now actively choose exchanges based on transparency levels, making regular PoR updates vital for maintaining trust. USDT and other stablecoins like USDC maintain their value through monthly attestations that verify each token is backed by real dollars, similar to how exchanges prove their reserves.
Binance’s monthly reporting schedule and commitment to transparency have positioned it as an industry benchmark, though the ongoing debate shows there’s always room for improvement in how these reports communicate asset holdings. As the saying goes in crypto circles, “don’t trust, verify” – and that’s exactly what PoR enables users to do.
