Binance Releases Audit of Bitcoin Reserves and Launches Asset Verification Tool

Grassroots Economics (GE), the non-profit organization behind the community inclusion currency (CIC) model in Africa, and the Sarafu Network and token, has decided to host its network on the Celo blockchain.

A snapshot of the Safaru Network and voucher dashboard showing the number of transactions and volumes of the #Sarafu token over a one-month period pic.twitter.com/lYy2yNNyzw

— BitKE (@BitcoinKE) December 15, 2022

Previously, the Sarafu platform ran on its (Kitabu) blockchain where communities could launch their own community inclusion currencies (CIC’s) without needing the internet or users to pay gas fees.

According to GE, CICs are regional means of exchange that are derived from vouchers and supplement gaps in the national currency system. Due to economic instability, people often lack money with which to purchase from each other but communities can build their own prospering economies backed by locally available goods.

Reasons for Selecting Celo

Celo has an existing and thriving ecosystem in Kenya and GE envisions easily getting marketing support and open source contributions from the community.

Celo is also supporting GE in building capacity as a validator node for the Celo blockchain in an arrangement that will cover its gas costs making it possible for users of the Sarafu Network to continue accessing the service for free.

“We’ve been asking chains to help us with running and/or staking on a validation node, for years, so that we can guarantee gas to users. This is the first time a public chain has accepted our request to become part of their infrastructure and offer free services to marginalized communities as a humanitarian solution and means that we can be part of the Celo community of service providers.” – Grassroots Economics

GE is also drawn to the CELO ecosystem due to its compatibility with the Ethereum system, humanitarian values, and significant on-chain liquidity which it may access to support the Sarafu Network.

Following the integration, GE promises several benefits to CIC users across Kenya, Cameroon, and South Africa:

• Smooth Migration – No interruption to service
• Migrating Voucher Contracts to Celo and repopulating balances of users on Celo
• Improved UX/UI – Developing better user interfaces using marketplaces, open-source wallets, and bots. Users will be able to move off USSD/SMS onto other EVM wallets
• Connecting dApps – Example is; some voucher issuers and buyers want there to be insurance in case of defaults

The non-profit organization is also dismissing claims that it is selling out by moving over to Celo, pointing out that, in the long term, the network will have enough stake and be an independent validator which will be due, in part, to Celo’s support.

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Binance, the world’s largest crypto exchange, says it holds client funds in full, releasing a ‘proof of reserves’ indicating a 1:1 ratio between user balances on the exchange and the amount of Bitcoin held by the exchange.

‘582,485.9302 BTC are held by the exchange against a customer net balance of 575,742.4228 BTC, which comes to a 101% reserve ratio,’ Binance said.

The proof of reserves will:

• Start initially with $BTC
• Other tokens ($ETH, $USDT, $USDC, $BUSD, and $BNB) will follow, and
• Networks being added in the next couple of weeks

All crypto exchanges should do merkle-tree proof-of-reserves.

Banks run on fractional reserves.
Crypto exchanges should not.@Binance will start to do proof-of-reserves soon. Full transparency.

— CZ Binance (@cz_binance) November 8, 2022

Binance has also said it is working with third-party auditors to audit the results of the Proof of Reserves.

According to the exchange, when a user deposits one Bitcoin, Binance’s reserves increase by at least one Bitcoin to ensure client funds are fully backed:

“What this means in actual terms is that Binance holds all user assets 1:1 (as well as some reserves), we have zero debt in our capital structure and we have made sure that we have an emergency fund (SAFU fund) for extreme cases.”

Binance also announced a way for users to verify that their assets are held on the exchange via the website, letting them verify their assets against Binance’s Merkle tree.

Binance, which published a list of its crypto addresses earlier in November 2022, had said that it was working on a Merkle tree, a crypto technology that can be used to verify that individual user accounts are included in the total amount of client funds it has declared.

How to Verify Your Assets on the Binance Website

To verify your assets:

• Log in to the Binance Website, click on ‘Wallet,’ then click on ‘Audit’
• You will be able to find your Merkle Leaf and Record ID on the page
• Select the audit date you want to verify

You will then find confirmation of the audit type, your Record ID (specific to your account and this particular audit), the assets that were covered, and your asset balances at the time of the audit.

The Record ID enables you to independently verify that your account balance was included by the third-party auditor and would be available shortly.

These steps come a few weeks since Binance CEO, Changpeng Zhao, announced the exchange will be doing a Proof-of-Reserves.’ This came in the wake of FTX suspending customer withdrawals on its way to bankruptcy.

“Given recent events, it is understandable that the community will demand more from crypto exchanges, far more than what is currently required of traditional financial institutions. That’s why we’re pleased to provide this latest feature for our users to verify their funds,” said Changpeng Zhao.

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