Binance can cut a winning Bitcoin hedge even when customer assets are backed

Binance's latest reserve proof addresses whether a customer's Bitcoin is backed at a dated snapshot. A futures hedge faces a separate test: Binance's futures rules allow Auto-Deleveraging, or ADL, to reduce a profitable short that was offsetting the holding.In its Nov. 2 proof-completion update, Binance said holders of ten named tokens, including Bitcoin, could independently verify backing of at least 1:1 for the snapshot taken at 00:00 UTC on Oct. 31.The exchange had disclosed in its Oct. 31 recovery update that some futures insurance reserves helped replenish assets stolen in its security incident. Binance said it released only excess above its required coverage level and that the remaining funds exceeded that requirement. The disclosure alone establishes neither a reserve shortfall nor a measurable increase in ADL probability.Binance also distinguished its Futures Insurance Funds from user assets: they are its own reserves, outside the user-verifiable PoR view. Those reserves support the handling of bankrupt futures positions and reduce the need to close opposing traders' positions.Binance said it monitors those funds against stress scenarios and adds company funds when required...