To the Newcomers of the New World ~ “Forty-Four Coins”
On November 4, Binance released “Recovery Update #7,” whose headline said that 98% of the stolen assets had been covered. It also released a new, expanded snapshot of its Proof of Reserves (according to Binance, pending verification). He Yi said the new snapshot was as of 00:00 UTC on November 4, and that the number of covered tokens had increased from 10 to 44.
Going from 10 to 44 is progress. But covering tokens is not the same as covering liabilities.
Proof of Reserves answers the question “How much is there?” What really needs answering is “How much is owed?” A longer asset list only means that a broader range has been brought forward for verification. Binance says generating the zero-knowledge proof will take around 50–60 hours, after which users can independently verify whether their balances are covered 1:1. The proof has not yet been generated, and no third-party audit has been seen.
The longer the list, the more essential it is to have a matching liability statement.
Now consider the numbers. CZ cited public data claiming that Binance had net inflows of around $2.8 billion over 24 hours (pending verification), while the affected assets, according to the report’s figures, amounted to around $6.34 billion. Net inflows show that users are voting with their feet, but they cannot offset the shortfall or substitute for an audit.
Inflows signal confidence; coverage is a matter of the books. One cannot replace the other.
The statements are also changing. CZ said that theft on this scale meant there had been a serious security failure; no platform is immune to hacking, but that cannot be an excuse. He Yi said she fully accepted the criticism of security and access management, and replied that more than 50 attacks had been stopped this year, but this one got through because the hackers had evolved.
Acknowledging the problem is the first step. Making it possible for outsiders to verify is the second.
An exchange’s credibility does not come from what it says, but from whether outsiders can independently verify its claims. 98%, 44 coins, $2.8 billion—each figure needs to be reconciled using the same accounting basis.
Until the numbers add up, stay informed—and keep your distance.
The above is for sharing information and opinions only and does not constitute investment advice.
Ten coins have grown to forty-four,
The list is long, but the books aren’t whole.
Inflows can’t fill the shortfall’s score;
One audit outweighs a thousand words.
— Mingdao
On November 4, Binance released “Recovery Update #7,” whose headline said that 98% of the stolen assets had been covered. It also released a new, expanded snapshot of its Proof of Reserves (according to Binance, pending verification). He Yi said the new snapshot was as of 00:00 UTC on November 4, and that the number of covered tokens had increased from 10 to 44.
Going from 10 to 44 is progress. But covering tokens is not the same as covering liabilities.
Proof of Reserves answers the question “How much is there?” What really needs answering is “How much is owed?” A longer asset list only means that a broader range has been brought forward for verification. Binance says generating the zero-knowledge proof will take around 50–60 hours, after which users can independently verify whether their balances are covered 1:1. The proof has not yet been generated, and no third-party audit has been seen.
The longer the list, the more essential it is to have a matching liability statement.
Now consider the numbers. CZ cited public data claiming that Binance had net inflows of around $2.8 billion over 24 hours (pending verification), while the affected assets, according to the report’s figures, amounted to around $6.34 billion. Net inflows show that users are voting with their feet, but they cannot offset the shortfall or substitute for an audit.
Inflows signal confidence; coverage is a matter of the books. One cannot replace the other.
The statements are also changing. CZ said that theft on this scale meant there had been a serious security failure; no platform is immune to hacking, but that cannot be an excuse. He Yi said she fully accepted the criticism of security and access management, and replied that more than 50 attacks had been stopped this year, but this one got through because the hackers had evolved.
Acknowledging the problem is the first step. Making it possible for outsiders to verify is the second.
An exchange’s credibility does not come from what it says, but from whether outsiders can independently verify its claims. 98%, 44 coins, $2.8 billion—each figure needs to be reconciled using the same accounting basis.
Until the numbers add up, stay informed—and keep your distance.
The above is for sharing information and opinions only and does not constitute investment advice.
Ten coins have grown to forty-four,
The list is long, but the books aren’t whole.
Inflows can’t fill the shortfall’s score;
One audit outweighs a thousand words.
— Mingdao