Binance To Start Proof Of Reserves For Full Transparency – CZ

This comes after CZ announced that Binance would be acquiring its rival FTX to safeguard the liquidity crunch it is facing due to the mass withdrawal of funds.
By Pratik Bhuyan
Updated July 21, 2025

In latest developments, Binance CEO CZ, has recommended that all crypto exchanges should do merkle-tree proof-of-reserves. He further suggested that crypto exchanges should not run on fractional reserves, unlike banks.

CZ reassured his 7.3 million Twitter followers that Binance would also start proof-of-reserves for full transparency in order to avoid future doubts and concerns about the reserve balance.

This comes after CZ announced later today, that Binance would be acquiring its rival FTX to safeguard the liquidity crunch it’s facing due to the mass withdrawal of funds.

Advertisement
Advertisement

What is a Merkle-tree?

A Merkle tree, commonly referred to as a Hash tree, is a type of data structure used for data synchronization and verification. It is a tree data structure where each non-leaf node is a hash of its child nodes. It maintains data integrity and uses hash functions for this purpose.

Advertisement
Advertisement

Merkle-tree Applications:

Merkle trees are useful in distributed systems where the same data should exist in multiple places. It can be used to check inconsistencies. And therefore, Merkle-trees find their profound use in bitcoin and blockchain as well.

Advertisement
Pratik Bhuyan
Pratik has been a crypto evangelist since 2016 & been through almost all that crypto has to offer. Be it the ICO boom, bear markets of 2018, Bitcoin halving to till now - he has seen it all.
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.