Binance sold USDC for BTC & ETH after Silvergate bank collapse: PoR report

Cryptocurrency exchange Binance released its most current proof-of-reserves (PoR) on Aug. 1, offering transparency into its crypto reserves. However, the motion of its USDC reserves at the time of Silvergtes collapse captured many individualss attention and ended up being a subject of conversation on X.The latest reserve audit recommends Binance holds sufficient crypto and money to cover the user funds. The ratio of Binances net balances to its consumers net balances is more than 100% for all its properties as shown in the photo below.Binance property reserve ratio to customer funds. Source: BinanceWhile the report provides a healthy financial circumstance for Binance, its USDC reserve motions post-Silvergate collapse and the depeg of the stablecoin was the primary topic of conversation. The PoR shows that Binances USDC balance reduced from $3.4 billion on March 1st to $23.9 million by May 1st. Binance reserves balance between Dec. 2022- June 2023. Source: BinanceBinance began converting customers USDC to BUSD in September internally, however at the time it did hold a significant quantity of USDC in its reserves too. On-chain data recommends, right after Silvergate collapsed on March 12, Binance began converting its USDC reserves into Bitcoin (BTC) and Ether (ETH). Twitter on-chain expert Aleksandar Djakovic kept in mind that Binance bought approximately 100,000 BTC and 550,000 ETH in between March 12, – May 01, totalling around $3.5 billion, the same quantity as the surplus of USDC they had. Binance didnt react to Cointelegraphs ask for remarks at the time of writing.Related: USD-backed stablecoin pilot task released by Pacific island country of PalauThe revelation around Binances USDC reserves has actually become a hot topic, particularly after Coinbase CEO Brian Armstrong quipped throughout the company Q2 earnings call meeting that Binance has offered USDC for another stablecoin.PoR became a popular way for crypto exchanges to testify their holdings and share the same with the general public as a method of transparency after the collapse of the FTX crypto exchange. The calls for more openness grew in the crypto ecosystem after FTX ended up being maimed regardless of creators declaring its financial situation was healthy up until its collapse in November 2022. Gather this short article as an NFT to preserve this moment in history and reveal your assistance for independent journalism in the crypto space.Magazine: Yuan stablecoin group apprehended, WeChats brand-new Bitcoin costs, HK crypto rules: Asia Express

Other Questions People Ask

What prompted Binance to sell USDC for BTC & ETH after the Silvergate bank collapse?

Following the collapse of Silvergate Bank on March 12, Binance began converting its USDC reserves into Bitcoin (BTC) and Ether (ETH). This decision was influenced by the instability surrounding USDC, which saw a significant depeg during that period. The conversion aimed to bolster Binance's asset stability and maintain user confidence in its reserves.

How did Binance's USDC reserves change after the Silvergate bank collapse?

Binance's USDC reserves experienced a dramatic decline, dropping from $3.4 billion on March 1 to just $23.9 million by May 1. This significant reduction was part of Binance's strategy to convert USDC into more stable cryptocurrencies like BTC and ETH. The proof-of-reserves report highlighted this movement, drawing attention to the exchange's liquidity management during a turbulent time.

What does the proof-of-reserves report reveal about Binance's financial health after selling USDC?

The proof-of-reserves report indicates that Binance maintains a healthy financial situation, with net balances exceeding 100% of customer funds across all assets. Despite the significant reduction in USDC reserves, the overall asset management strategy appears robust. This transparency is crucial for reassuring users about the safety of their funds amidst market fluctuations.

How much BTC and ETH did Binance acquire after selling USDC?

Between March 12 and May 1, Binance reportedly acquired approximately 100,000 BTC and 550,000 ETH, totaling around $3.5 billion. This acquisition directly correlates with the amount of USDC they converted during that timeframe. The strategic shift towards these cryptocurrencies reflects Binance's response to market conditions following the Silvergate collapse.

What impact did the Silvergate bank collapse have on the cryptocurrency market?

The collapse of Silvergate Bank had a ripple effect throughout the cryptocurrency market, particularly affecting stablecoins like USDC. The instability led to increased scrutiny of exchanges and their reserve practices, prompting calls for greater transparency. Binance's actions in converting USDC to BTC and ETH highlight how exchanges are adapting to maintain trust and stability in a volatile environment.