Binance Slashes Reserves, Wipes Out 99% of Solana, USDT, ETH, BTC

• Binance reserves have decreased by $8 billion, with a notable reduction in BTC, ETH, USDT, and SOL holdings.
• While it registered an increase in USDC, it remains unclear why the crypto exchange is reallocating or selling.
• As of this writing, Binance has yet to clear the air on the development, while CZ has not addressed the matter.

To the surprise of the broader market, Binance’s proof-of-reserves (PoR) shows that it has offloaded or reallocated billions in assets.

However, the unexpected depletion of its Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and Tether (USDT) holdings has raised concerns over the exchange’s intentions.

Some participants find this movement unusual and are now concerned about the broader market stability.

Binance Reserves Fall By Billions

As of December 2024, the exchange had non-customer holdings totaling $14 billion, including substantial amounts of Bitcoin (46,896 BTC), Ethereum (216,312 ETH), Solana (442,234 SOL), and Tether (2.99 billion USDT).

However, on Feb. 10, data shows it had wiped out nearly 100% of its BTC, USDT, ETH, and SOL holdings. The updated figures show that Binance now holds only 2,746 BTC, 275.7 million USDT, 174 ETH, and 4,179 SOL.

This reduction marks a loss of $4 billion in BTC, $3 billion in USDT, and $700 million in ETH. Overall, Binance’s reserves have shrunk by $8 billion, sparking questions about the exchange’s intentions.

Reasons Remain Unclear, Only Speculation

While the exchange reduced a large part of its SOL, BTC, USDT, and ETH holdings, BNB had the lowest reduction, with only 16.6% gone. Furthermore, it is important to note that its USDC allocation increased.

As of this writing, it was uncertain why Binance reduced the assets in its reserves. However, some analysts suggest that the movement may be aimed at enhancing liquidity or preparing for future market fluctuations.

“Currently, most cryptocurrencies have been reallocated into the stablecoin USDC. Among these, BNB has the lowest reduction rate, at only -16.6%. If we look at the market conditions from January, most cryptocurrencies were at their historical highs,” crypto analyst AB Kuai Dong said about the matter.

Others argue that Binance may have been forced to make these moves to pay fines related to regulatory issues.

In February 2024, a U.S. federal judge ordered Binance to pay $4.3 billion in fines for money laundering violations. The plea agreement saw Binance forfeit $2.51 billion and pay a criminal fine of $1.81 billion.

The case also resulted in the imprisonment of former CEO Changpeng Zhao (CZ) for four months.

A Shift Toward Transparency

Binance’s proof-of-reserves program began in the aftermath of the FTX collapse in November 2022, which was triggered by a weak balance sheet filled with illiquid altcoins. This failure led to a massive liquidation, driving Bitcoin’s price below $17,000.

The collapse underscored the need for greater transparency in the crypto industry, prompting Binance to launch its PoR initiative. This initiative was intended to restore trust, and other exchanges soon followed suit by publishing their own reserves.

Yet, despite the recent changes in Binance’s reserves, the exchange has remained silent. Changpeng Zhao, who has often been vocal on such matters, has not commented publicly on the matter. As of now, the reasons behind the significant asset reductions remain speculative.