Crypto exchanges to publish ‘proof-of-reserves’ following FTX’s implosion
Several leading crypto exchanges, including Binance, Huobi, OKX, KuCoin, etc., have revealed intentions to publish their fund reserves to arrest the current contagion fears grappling the crypto market.
Binance CEO Changpeng Zhao advised that crypto exchanges should do a Merkle-tree proof-of-reserves. According to him, while traditional financial institutions like banks can run on fractional reserves, crypto exchanges shouldn’t.
All crypto exchanges should do merkle-tree proof-of-reserves.Banks run on fractional reserves. Crypto exchanges should [email protected] will start to do proof-of-reserves soon. Full transparency.— CZ 🔶 Binance (@cz_binance) November 8, 2022
CZ added that Binance was going to start its proof-of-reserves soon in its bid for full transparency. On Nov. 9, he further revealed that the exchange had topped its SAFU insurance fund to $1 billion. Binance established the fund in July 2018 to protect users’ funds.
CZ did not reveal when the exchange will publish its Merkle-tree proof-of-reserves.
Other exchanges take cue
Gate.io’s CEO, Lin Han, stated that the exchange was the first to provide 100% proof of reserves with Merkle Tree verification.
(1/2) As the 1st exchange to provide 100% Proof of Reserves with Merkle Tree verification, will disclose our open-source solution to the industry and support our peers conducting PoR to promote transparency and accelerate healthy industry development.— Lin Han (@han_gate) November 9, 2022
Han continued that the crypto firm would disclose its open-source solution to the industry to promote transparency and accelerate healthy industry development. Gate.io has carried out two proof-of-reserves audits conducted by Armanino LLP. The most recent result was published on Oct. 28.
Justin Sun revealed three wallets that he stated contain 48,555 Bitcoin (roughly $85 million), which is less than 3% of Huobi Global and Poloniex’s assets. According to Sun, the exchanges’ other assets include the US Dollar, stablecoins, and Treasury bills.
12qTdZHx6f77aQ74CPCZGSY47VaRwYjVD8143gLvWYUojXaWZRrxquRKpVNTkhmr415B1KVpuCfhftkzJ67ZUegaMuaYey7qni7pPjThese 3 addresses has 48,555 #Bitcoin. This is only less than 3% of the total high value assets we have, including btc, usd, stablecoins, T-bills.. @HuobiGlobal @Poloniex— H.E. Justin Sun🌞🇬🇩🇩🇲🔥 (@justinsuntron) November 9, 2022
CEOs of KuCoin and OKX, Johnny Lyu and Jay Hao, revealed that their exchanges would publish their proof-of-reserves within the next 30 days.
We also believe that all major crypto venues should publicly share their auditable merkle tree proof-of-reserves or POF. We plan to publish ours in the coming weeks (< 30 days) for customer transparency.4/6— jay_star.okx ⚛️ OKX CEO (@star_okx) November 9, 2022
Oluwapelumi is a believer in the transformative power Bitcoin and the blockchain industry holds.Source