South African accounting firm Mazars stated that crypto exchange Binance.com is fully collateralized. Binance had commissioned the report to assure customers that it had enough reserve funds to cover customers’ assets on the exchange at a ratio of at least 1:1.
Binance’s bitcoin asset balance (Binance’s bitcoins) was 582,486 bitcoins and its customer liability balance (customers’ bitcoins) was 597,602 bitcoins. Comparing these two figures, Binance’s bitcoin holdings are under-collateralized by 3% (or $245 million, per the bitcoin price on the reporting date) against its customers’ bitcoin assets.
According to a July report by the Financial Reporting Council, Mazars has been growing too fast, picking up higher-risk audits being dropped by their peers, without adequate controls to ensure high-quality audits.