Changpeng Zhao, founder and chief executive officer of cryptocurrency exchange Binance, tweeted on Saturday that the company’s proof of reserves (PoR) have “absolutely no negative balances involved” after the exchange released its PoR on Friday.

See related article: Binance releases proof of reserves

Fast facts

  • Jesse Powell, cofounder and CEO of crypto exchange Kraken, tweeted on Saturday that Binance’s statement of assets was “pointless without liabilities.”
  • “The merkle tree is just hand wavey bullshit without an auditor to make sure you didn’t include accounts with negative balances,” Powell wrote in the tweet.
  • In response, Zhao said that Binance’s PoR did not count in accounts with negative balances and “it will be verified in the audit for the above PoR.”
  • Zhao added that it takes a few weeks to have third-party auditors complete their work.
  • The release of proof of reserves has been promoted as a method for exchanges to ensure safe custody of users’ assets since the collapse of FTX earlier this month.

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