BINANCE SOLD USDC FOR BTC AND ETH AFTER SILVERGATE BANK COLLAPSE: POR REPORT

The cryptocurrency world is always buzzing with activity, but recent events surrounding Binance's USD Coin (USDC) holdings have sparked particular interest.Binance, one of the world's largest crypto exchanges, released its latest Proof-of-Reserves (PoR) report on August 1st, aiming to provide transparency into its crypto reserves. Binance s depleting USDC reserves has become a hot topic in the crypto ecosystem, especially after Coinbase CEO s quip during the company s Q2 earning call. Cryptocurrency exchange BinanceHowever, the report inadvertently ignited a firestorm of discussion, primarily focused on the exchange's USDC movements following the collapse of Silvergate Bank. Onchain data suggests that Binance started converting its USDC into Ether following Silvergate s collapse. Onchain analyst Aleksandar Djakovic pointed out that between March 12 and May 1, BinanceWhat exactly happened? Summary: Binance sold a significant amount of USDC for Bitcoin and Ether after the collapse of Silvergate bank, according to the latest proof-of-reserves report. The report also shows that Binance holds more than enough crypto and cash to cover user funds.Why did Binance's USDC balance plummet? On-chain data suggests, right after Silvergate collapsed on March 12, Binance started converting its USDC reserves into Bitcoin (BTC) and Ether (ETH). Twitter on-chain analyst Aleksandar Djakovic noted that Binance purchased approximately 100,000 BTC and 550,000 ETH between March 12, May 01, totalling around $3.5 billion, the same amount asAnd what does this mean for the broader crypto market?

This isn't just about numbers; it's about trust, transparency, and the ripple effects of institutional failures in the crypto space. Cryptocurrency exchange Binance released its latest proof-of-reserves (PoRs) on Aug. 1, offering transparency into its crypto reserves. However, the movement of its USD Coin BITSTAMP:USDCUSD reserves at the time of Silvergte s collapse caught many people s attention and became a topic of discussionThe collapse of Silvergate, a crypto-friendly bank, sent shockwaves through the industry, and Binance's reaction, as revealed in its PoR report, provides a fascinating case study in risk management and market adaptation. Binance s depleting USDC reserves has become a hot topic in the crypto ecosystem, especially after Coinbase CEO s quip during the company s Q2 earning call. Cryptocurrency exchange Binance released its latest proof-of-reserves (PoRs) on Aug. 1, offering transparency into its crypto reserves. However, the movement of its USD Coin USDC $1.00 reserves at the time of Silvergte s collapseLet's delve into the details, analyze the on-chain data, and understand the implications of Binance's decision to convert its USDC reserves into Bitcoin (BTC) and Ether (ETH).

The Silvergate Collapse and Its Impact

The story begins with Silvergate Bank, a financial institution that had become a key player in the cryptocurrency ecosystem. While the report presents a healthy financial situation for Binance, its USDC reserve movements post-Silvergate collapse and the depeg of the stablecoin were the main topics of discussion. The PoR shows that Binance s USDC balance decreased from $3.4 billion on March 1 to $23.9 million by May 1.Unfortunately, Silvergate faced significant challenges, ultimately leading to its collapse.This was largely triggered by the ripple effects of the FTX implosion, one of Silvergate's leading clients.The bank reported losses exceeding $1 billion in the last quarter of 2025, a stark indication of the severity of the crisis.

Silvergate's downfall sent tremors throughout the crypto market.The bank's close ties to various crypto firms meant that its struggles had far-reaching consequences. While the report presents a healthy financial position for Binance, the exchange's movements in USDC reserves after the Silvergate crash and stablecoin drop raised a big question mark. Specifically, the PoR shows that Binance's USDC balance fell from $3.4 billion on March 1 to $23.9 million on May 1.Confidence in stablecoins and crypto exchanges wavered as investors worried about potential contagion risks.The market was already fragile due to ongoing regulatory scrutiny and lingering fears from previous collapses, making the Silvergate situation particularly concerning.

This event created a flight to safety among some investors and institutions.Liquidity was pulled from riskier assets, and firms looked to shore up their balance sheets, anticipating further market volatility.Which brings us to Binance’s reaction.

Binance's USDC Reserves: A Closer Look

Binance's PoR report offered a snapshot of the exchange's asset holdings, intended to demonstrate that it had sufficient reserves to cover user funds. As it turns out, something was interesting about Binance s holdings before and after Silvergate s collapse. BNB started converting its customers USDC into BUSD, as far back as September 2025. It is also worth mentioning that Binance, at the time, had a relatively massive USDC reserve.The report itself showed a healthy financial position for Binance overall, instilling a sense of confidence in users. Binance s latest proof-of-reserves (PoR) report has come under scrutiny following its depleting USDC reserves after the collapse of Silvergate Bank. The report released on Aug 1 to show transparency in the exchange s dealings with user assets has sparked arguments across social media spaces heightened by Brian Armstrong s witty comment atHowever, it was the drastic change in the USDC balance that caught the eye of analysts and crypto enthusiasts.

According to the report, Binance's USDC reserves experienced a dramatic decrease between March 1st and May 1st. On-chain data suggests that right after Silvergate collapsed on March 12, Binance started converting its USDC reserves into Bitcoin (BTC) and Ether (ETH). Twitter on-chain analyst Aleksandar Djakovic noted that Binance purchased approximately 100,000 BTC and 550,000 ETH between March 12 and May 1, totaling around $3.5 billion, the same amountThe figures tell a compelling story: on March 1st, Binance held a substantial $3.4 billion in USDC. On-chain data suggests that right after Silvergate collapsed on March 12, Binance started converting its USDC reserves into Bitcoin (BTC) and Ether (ETH).By May 1st, this figure had plummeted to just $23.9 million.This represents a massive reduction of over 99%, raising questions about the reasons behind this shift and its potential implications.

The PoR revealed the company’s asset reserve ratio to customer funds, aiming to showcase the exchange's solvency.Despite this transparency, the considerable reduction in USDC holdings post-Silvergate collapse and the concurrent depeg of USDC stirred conversations throughout the cryptocurrency ecosystem.

The Conversion to BTC and ETH

So, where did all that USDC go?On-chain data provides some answers.According to reports and analyses, Binance began converting its USDC reserves into Bitcoin (BTC) and Ether (ETH) immediately after Silvergate's collapse on March 12th.This strategic move suggested a deliberate shift in asset allocation, likely driven by risk management considerations.

On-chain analyst Aleksandar Djakovic highlighted that between March 12th and May 1st, Binance purchased approximately 100,000 BTC and 550,000 ETH.This significant acquisition of Bitcoin and Ether aligns with the reduction in USDC reserves. [ad_1]Cryptocurrency exchange Binance released its latest proof-of-reserves (PoR) on Aug. 1, offering transparency into its crypto reserves. However, the movement of its USDC reserves at the time of Silvergte's collapse caught many people s attentioThe estimated value of these purchases totaled around $3.5 billion, roughly equivalent to the amount of USDC that disappeared from Binance's balance sheet during that period.

Why Convert to BTC and ETH?

Several factors likely contributed to Binance's decision to convert its USDC reserves into Bitcoin and Ether:

• Perceived Safety: In times of market uncertainty, Bitcoin and Ether are often viewed as relatively safer assets compared to stablecoins.Converting to these established cryptocurrencies could be seen as a way to reduce exposure to potential stablecoin-related risks.
• Market Opportunity: The market dip following Silvergate's collapse may have presented an opportunity to acquire BTC and ETH at potentially favorable prices. The announcement came after the crypto-friendly bank suffered $1 billion worth of losses in the last quarter of 2025 due to the collapse of crypto exchange FTX, one of Silvergate s leading clients. Binance Sells USDC For BTC ETH. Binance s PoR report shows that the company s USDC balance decreased from $3.4 billion on March 1 to $23.9Binance may have viewed this as a strategic investment opportunity.
• De-risking: With the depeg of the stablecoin occuring at the same time as the Silvergate crash, it seems likely Binance wanted to de-risk its holdings.

Controversy and Criticism: Brian Armstrong's Quip

Binance's depleting USDC reserves didn't go unnoticed.The issue became a hot topic within the crypto community, particularly after Coinbase CEO Brian Armstrong seemingly alluded to the situation during Coinbase's Q2 earnings call.While Armstrong didn't explicitly name Binance, many interpreted his comments as a veiled critique of the exchange's USDC management.

This created a back-and-forth dialogue within the crypto space as users and analysts explored Binance’s PoR report and on-chain data.This exchange raised questions about whether or not it was best to move a large amount of capital into the safety of Bitcoin and Ether, or whether Binance made the right move at the right time.

The details around Binance's PoR report and its depleting USDC reserves remain an active and controversial topic.How the exchange responds to concerns, and what its plan for USDC holdings is, will determine whether Binance can rebuild and maintain trust in its stablecoin operations.

Analyzing the Proof-of-Reserves (PoR) Report

Binance's release of its PoR report was intended to foster transparency and build trust within the crypto community.A Proof-of-Reserves is a process where a cryptocurrency exchange or custodian cryptographically proves that it holds the assets it claims to hold on behalf of its users.By providing cryptographic evidence of its reserves, Binance aimed to assure users that their funds were safe and adequately backed.

While the overall report indicated a healthy financial position for Binance, the sharp decrease in USDC reserves overshadowed the positive aspects.The report highlighted the ratio of asset reserves to customer funds, aiming to demonstrate the exchange's solvency. Binance asset reserve ratio to customer funds. Source: Binance. While the report presents a healthy financial situation for Binance, its USDC reserve movements post-Silvergate collapse and the depeg of the stablecoin was the main topic of discussion. The PoR shows that Binance s USDC balance decreased from $3.4 billion on March 1st to $23.9However, the conversation quickly shifted to the massive USDC reduction and the circumstances surrounding it.

How PoR Works

Proof-of-Reserves typically involves the following steps:

1. Merkle Tree: The exchange uses a Merkle tree data structure to represent all user balances. Nifty News: Adidas unveils resident Web3 artists, Mutant Ape sells for 500 ETH and moreThis allows for efficient verification of individual user account balances without revealing other users' information.
2. Cryptographic Audit: An independent auditor verifies the exchange's asset holdings by comparing the total user balances in the Merkle tree against the exchange's on-chain reserves.
3. Public Disclosure: The exchange publishes the Merkle tree root, allowing users to independently verify that their account balance is included in the total reserves.

Alternatives to USDC: Exploring Other Stablecoins

The USDC situation and Binance's response have prompted some users to consider alternative stablecoins. Binance s depleting USDC reserves has become a hot topic in the crypto ecosystem, especially after Coinbase CEO s quip during the Binance sold USDC for BTC and ETH after Silvergate Bank collapse: PoR report - XBT.MarketWhile USDC remains a popular and widely used stablecoin, other options are available, each with its own unique characteristics and risk profiles.

Popular Stablecoin Alternatives

• Tether (USDT): The largest stablecoin by market capitalization, USDT has faced scrutiny over its reserves and transparency.
• Dai (DAI): A decentralized stablecoin pegged to the US dollar, DAI is collateralized by a basket of cryptocurrencies on the MakerDAO platform.
• TrueUSD (TUSD): Another USD-pegged stablecoin, TUSD claims to be fully collateralized and audited by third-party firms.
• Binance USD (BUSD): A stablecoin issued by Binance in partnership with Paxos, BUSD is pegged to the US dollar and subject to regulatory oversight.

It's important to conduct thorough research and understand the risks associated with each stablecoin before allocating funds. On-chain data suggests, right after Silvergate collapsed on March 12, Binance started converting its USDC reserves into Bitcoin (BTC) and Ether (ETH). Twitter on-chain analyst Aleksandar Djakovic noted that Binance purchased approximately 100,000 BTC and 550,000 ETH between March 12, - May 01, totalling around $3.5 billion, the same amount asFactors to consider include the stability of the peg, the transparency of reserves, and the regulatory environment surrounding the stablecoin.

Practical Advice for Crypto Users

The Binance USDC situation offers some important lessons for crypto users.Here's some actionable advice to help you navigate the complex and evolving crypto landscape:

• Diversify your holdings: Don't put all your eggs in one basket. Cryptocurrency exchange Binance released its latest proof-of-reserves (PoRs) on Aug. 1, offering transparency into its crypto reserves. However, the movement Binance sold USDC for BTC and ETH after Silvergate Bank collapse: PoR report - Mount Rushmore CryptoDiversifying across different cryptocurrencies and asset classes can help mitigate risk.
• Do your own research (DYOR): Don't rely solely on the opinions of others. [ J ] Trump speech at Bitcoin 2025 triggers $24M in long liquidations amid market volatility Market Analysis [ J ] Ledger launches new wallet with secure, contactless E Ink touchscreen displays BusinessConduct thorough research before investing in any cryptocurrency or stablecoin.
• Understand stablecoin risks: Be aware of the potential risks associated with stablecoins, including depegging, regulatory uncertainty, and counterparty risk.
• Monitor exchange reserves: Pay attention to exchange PoR reports and other indicators of financial health.
• Consider self-custody: For long-term holdings, consider storing your cryptocurrencies in a self-custodial wallet where you control your private keys.

The Future of Binance and Stablecoin Management

The events surrounding Binance's USDC reserves raise questions about the future of stablecoin management and the role of exchanges in maintaining market stability. [ad_1]Cryptocurrency exchange Binance released its latest proof-of-reserves (PoRs) on Aug. 1, offering transparency into its crypto reserves. However, the movement of its USD Coin (USDC) reserves at the time of Silvergte s collapse caught many peoplIt’s likely that going forward Binance will manage its stablecoin holdings more conservatively.

The exchange will need to balance the need to provide liquidity and trading opportunities with the need to manage risk and maintain user confidence.Going forward we can expect:

• Enhanced transparency: Exchanges may need to provide more frequent and detailed PoR reports to demonstrate the health of their reserves.
• Robust risk management: Exchanges will need to implement robust risk management frameworks to protect themselves and their users from potential stablecoin-related risks.
• Regulatory clarity: Clearer regulatory guidelines for stablecoins and crypto exchanges could help to foster stability and confidence in the market.

The Binance USDC situation serves as a reminder that the crypto market is still relatively young and evolving.Events like the Silvergate collapse and the resulting market volatility can have a significant impact on exchanges and their users.By learning from these experiences and adopting best practices for risk management and transparency, the crypto industry can continue to mature and build a more resilient ecosystem.

Frequently Asked Questions (FAQ)

What is a Proof-of-Reserves (PoR) report?

A Proof-of-Reserves (PoR) report is a process where a cryptocurrency exchange or custodian cryptographically proves that it holds the assets it claims to hold on behalf of its users.It's a method of demonstrating transparency and solvency by providing cryptographic evidence of reserves.

Why did Binance sell USDC for BTC and ETH?

Binance's decision to sell USDC for BTC and ETH after the Silvergate Bank collapse was likely driven by a combination of factors, including a desire to reduce exposure to stablecoin-related risks, capitalize on potentially favorable market conditions, and de-risk in the face of market uncertainty following the Silvergate failure.

What are the risks of holding stablecoins?

Stablecoins, while designed to maintain a stable value, are not without risks.These risks include depegging (when the stablecoin's value deviates from its intended peg), regulatory uncertainty, counterparty risk (related to the issuer of the stablecoin), and potential for reserve mismanagement.

How can I protect my crypto holdings during market volatility?

During times of market volatility, it's important to:

• Diversify your holdings.
• Do your own research (DYOR).
• Understand the risks associated with different assets.
• Monitor exchange reserves.
• Consider self-custody for long-term holdings.

Conclusion

The story of Binance's USDC reserves and its subsequent conversion to Bitcoin and Ether following the Silvergate Bank collapse highlights the complexities and challenges of navigating the cryptocurrency landscape. Cryptocurrency exchange Binance released its latest proof-of-reserves (PoR) on Aug. 1, offering transparency into its crypto reserves. However, the movement of its USDC reserves at the time of Silvergte s collapse caught many people s attention and became a topic of discussion on X.While Binance's PoR report aimed to demonstrate transparency and financial health, it inadvertently sparked debate about risk management, stablecoin stability, and the role of exchanges in maintaining market confidence.The decision to shift from USDC to BTC and ETH was likely a calculated response to market uncertainty, reflecting a desire to protect user funds and capitalize on potential investment opportunities. Source: Binance While the report presents a healthy financial situation for Binance, its USDC reserve movements post-Silvergate collapse and the depeg of the stablecoin were the main topics of discussion. The PoR shows that Binance s USDC balance decreased from $3.4 billion on March 1 to $23.9 million by May 1.The situation offers valuable lessons for crypto users, emphasizing the importance of diversification, due diligence, and a thorough understanding of the risks associated with stablecoins and other digital assets.As the crypto market continues to evolve, transparency, robust risk management, and regulatory clarity will be essential for building a more resilient and trustworthy ecosystem.

The main takeaways include:

• Binance significantly reduced its USDC reserves after the Silvergate Bank collapse.
• The exchange converted a large portion of its USDC holdings into Bitcoin and Ether.
• The move was likely driven by risk management and market opportunity considerations.
• The situation highlights the risks associated with stablecoins and the importance of transparency for crypto exchanges.

Are you ready to take control of your crypto investments?Start by diversifying your portfolio and researching the risks associated with different stablecoins today!You can start with researching alternative stablecoins.