The box for the crypto exchanges in comparison

This article was created in collaboration with BTC-ECHO editor Moritz Draht.

If the holes in FTX’s balance sheet had been noticed in time, worse things might have been prevented. The exchanges are now under general suspicion: How many reserves do the trading venues manage? And how are they put together? The collapse of FTX has raised questions about the stock exchanges’ liquidity. They responded and published addresses of their cold and hot wallets to clear the table: Proof of Reserve. An overview of the respective reserves.

Proof of reserve: This is how many coins the exchanges hoard

Almost 250 trading venues are listed on Coinmarketcap. The following selection is limited to the largest exchanges that have also published their reserves. The basis for this analysis is data from the analysis platform Nansen, which is based on official information from the trading venues. Nevertheless, Nansen emphasizes that it is not a “complete or comprehensive statement of the actual assets or reserves that the exchange holds for its users or customers.”

Some exchanges, including Kraken and Bitmex, offer a proof of reserve but do not publish an aggregate summary. Users can individually check whether their deposits are covered. A full audit of the balance sheets is still pending on the stock exchanges. However, the new measure does not come without criticism: Kraken CEO Jesse Powell pointed out in this context thereafterthat evidence of reserves is incomplete without an indication of liabilities. Is the approach just pseudo-transparency or is it really a trust-building tool?

The following graphic shows the total value of the respective reserves. These are snapshots – the balances are constantly fluctuating. At $95 billion (according to the quarterly report), the largest crypto holdings are at Coinbase. Followed by Binance with $62 billion. Bitfinex holds a total of over $7 billion in cryptocurrencies, in third place.

The top dog: Coinbase

The listed US crypto exchange Coinbase has the most reserves in comparison. About 40 billion US dollars in Bitcoin alone. Almost 15 billion US dollars less is in ether: 24 billion US dollars. Altcoins make up almost a third. The wallet on the crypto exchange has also been filled so well by institutional investors, for whom Coinbase is the hub of the crypto market.

Binance relies on stablecoins

After Coinbase, Binance, the world’s largest crypto exchange by trading volume, has the highest reserves. Most of it in stablecoins: about $35 billion. $20 billion in BUSD, $15 billion in USDT. A decent pound, unlike highly volatile cryptocurrencies, stablecoins remain stable in value and thus form a healthy cushion to protect customer funds. Binance has $5.4 billion in each of the two largest cryptocurrencies, Bitcoin and Ether.

In addition to Bitcoin, Binance also holds large amounts of BNB, its own exchange token: about seven billion US dollars in BNB tokens are on the Binance wallet. In light of the crisis surrounding FTX, own exchange tokens are considered risky as a reserve hedge.

Bitfinex: Risky game with own token?

A third of the reserves at Bitfinex consist of the internal LEO token. Possibly not the best basis for removing doubts about liquidity. However, the biggest part is Bitcoin at around three billion US dollars. Bag Ether with 1.2 billion US dollars.

OKX: Great confidence in Tether

Almost half of OKX’s total reserves consist of USDT, Tether’s stablecoin. In principle, stablecoins are considered a safe bank unless they are algorithmically secured. But even with Tether, there has always been a suspicion in the past that the cryptocurrency is not fully physically covered. The second largest position at OKX is Bitcoin with around 1.5 billion US dollars. This is followed by Ether at 1.1 billion.

Huobi: It’s all in the mix

Huobi also pools most of the funds in HT, its own exchange token. The FTX crash showed how fragile blind trust in your own token can be. It is possible that the public pressure following the pending revisions to the stock exchange reserves will ensure that trading venues use stock exchanges less than before. In addition, the portfolio seems sufficiently diversified with USDT, BTC, TRX and ETH.

Crypto.com has gone to the dogs

There is a surprise at Crypto.com: The crypto exchange has parked half a billion US dollars in Shiba Inu. This is news, no other exchange has this much exposure to memecoins. Just a few months ago, the cryptocurrency mocked itself among the top 15 by market capitalization. All in all, Crypto.com’s balance sheet seems balanced: stablecoin USDC, memecoin Shiba Inu, and the driving forces bitcoin and ether are roughly evenly split.

KuCoin: How secure are exchange tokens?

KuCoin is the fourth largest crypto exchange by trading volume after Binance, Coinbase and Kraken. But the gap to Coinbase is huge: With $2.5 billion in crypto assets, KuCoin has just over 2.6 percent of Coinbase’s deposits. Here, too, there is a focus on stablecoins. 830 million US dollars are deposited in USDT. This is followed by another exchange token with KCS (US$444 million). The exchange holds relatively little in bitcoin ($260 million) and ether ($192 million).

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