Binance 43rd Proof-of-Reserves Report: User BTC and ETH Holdings Surge While USDT Declines

Bitcoin. Users added 25,838 BTC during May, the largest single-month BTC inflow since at least the 40th PoR report in March, which showed a decline of 8,004 BTC . This marks a reversal from the drawdowns seen in March–April 2026 .

Ethereum. ETH holdings jumped 10.17% to about 4.14 million ETH, outpacing BTC growth. The previous report (42nd, May 1 snapshot) had shown lower ETH levels, and the April 1 snapshot had ETH at only ~3.69 million ETH , so May represented a significant recovery.

USDT. The 1.33% drop (~460 million USDT) contrasts with the BTC/ETH buildup. Analysts interpreted this as users rotating stablecoin liquidity into risk-on assets (BTC and ETH) during May . The USDT decline mirrors a pattern seen earlier in 2026—the 40th PoR also showed a USDT drop alongside falling BTC and ETH .

Transparency Methodology

Binance's PoR system works at three levels:

• Merkle tree cryptography. Since November 2022, Binance has published a Merkle tree of all user net balances. Each user can independently verify that their account is included in the tree and that the sum of all user liabilities equals the reported total .
• zk-SNARKs enhancement. In February 2023 Binance added zero-knowledge proofs (zk-SNARKs) to the PoR system. This allows users to cryptographically verify that every individual account has a non-negative net balance without exposing any user's balance to others—closing a privacy leak in the plain Merkle-tree design .
• On-chain reserve verification. Binance publishes wallet addresses holding the exchange's own reserves and provides tools to compare on-chain balances against the reported user liability total. Reserve ratios for major assets have consistently exceeded 100%—for example, BTC was reported at 103.76% in the 43rd report .

Limitations as a Point-in-Time Snapshot

The report has several inherent limitations:

• Point-in-time only. The snapshot captures balances at exactly June 1, 2026. Any deposits, withdrawals, or trades after that moment are not reflected until the next report .
• No liability audit of off-chain obligations. The PoR confirms that on-chain wallet balances cover stated user balances, but it does not audit whether Binance's total user liability figure is complete or correct. Off-chain balances, internal ledger entries, or fiat-denominated liabilities are not covered by the cryptographic proof .
• No third-party audit opinion. The reports are self-published attestations, not independent GAAP or SOC audits. Binance describes them as "Proof of Reserves" rather than a full financial audit .
• zk-SNARKs assumptions. While zk-SNARKs prevent negative-balance hiding, the proof still depends on the correctness of Binance's internal database as the input to the Merkle tree. A malicious or compromised database could still produce a valid-looking tree .

Bitcoin Accumulation on Binance: Late 2022 to Mid-2026

Tracking Binance's PoR reports shows an upward, though non-linear, BTC accumulation trend:

• November 2022 (1st PoR): ~575,742 BTC—the starting baseline after Binance launched its PoR system in the wake of the FTX collapse .
• Mid-2023 – late 2024: BTC holdings fluctuated but trended upward. On-chain data from CryptoQuant recorded Binance wallet balances reaching ~676,834 BTC in February 2026, the highest since November 2024 .
• Late 2025 – early 2026 pullback: The 40th PoR (March 1, 2026) showed BTC back down to ~631,000 BTC after drops in January–February . The 41st PoR (April 1) fell further to ~619,000 BTC—a three-month low .
• May 2026 recovery: The 43rd PoR's 25,838 BTC inflow brought holdings back to ~630,000 BTC, partially recovering toward the February highs .

Broader market data reinforces this as a platform-wide trend: Binance's own on-chain analysis noted that Bitcoin whale wallets (1,000–10,000 BTC) accelerated accumulation in early 2026, and mid-sized holders increased their positions throughout 2025–2026 . The rotation from USDT into BTC and ETH during May fits this longer-term accumulation pattern, where users move stablecoin liquidity into volatile assets during perceived favorable market conditions .