Customers Can Now Verify Kraken’s Bitcoin Reserves

OKX Discloses Monthly Proof of Reserves, Holding $10.4 Billion in BTC, ETH, and USDT

by Blockchain NewsAugust 30, 2023

OKX, a global Web3 technology firm and cryptocurrency exchange, disclosed its 10th consecutive monthly Proof of Reserves (PoR) report today. The report shows that the exchange holds USD$10.4 billion in primary assets, such as Bitcoin (BTC), Ethereum (ETH), and Tether (USDT).

In an effort to understand public sentiment about PoR and transparency, OKX conducted two Twitter polls. The data reveals that 84% of respondents consider monthly PoR reports to be either ‘somewhat important’ or ‘very important.’ Additionally, 88% of respondents indicate that transparency is a significant factor in choosing a crypto platform.

The August PoR report from OKX encompasses 22 commonly traded digital assets and demonstrates that the exchange has maintained a reserve ratio above 100% for ten consecutive months. The reserve ratios for BTC, ETH, and USDT are currently 102%, 102%, and 103%, respectively. Lennix Lai, OKX Global Chief Commercial Officer, stated, “The 38% increase in assets under management on OKX coincides with our focus on transparency, as indicated by our monthly PoR reports.”

Since the launch of its PoR page in late 2022, the exchange reports that hundreds of thousands of users have engaged with its open-source verification tool. This tool enables users to independently verify the solvency of OKX while maintaining their privacy. To date, the exchange has made over 210,000 addresses public for its PoR program.

OKX plans to continue publishing monthly PoR reports and is developing tools for user verification of its solvency and asset backing.

The firm, which has over 50 million global users, is known for its crypto trading services and publishes its Proof of Reserves on a monthly basis as part of its operational transparency.

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Tagged : #BTC / #ETH / Cryptocurrency Exchange / News / Okx / Proof Of Reserves / USDT

Binance Adds 11 Tokens to PoR Report

by Blockchain NewsMarch 7, 2023

The proof-of-reserves (PoR) report of Binance, which is one of the most important and biggest cryptocurrency exchanges in the world, has been updated to include 11 new assets. MASK, ENJ, WRX, GRT, CHR, CRV, 1INCH, CVP, HFT, SSV, and DOGE are the tokens that are accounted for in the Proof of Reserves report. With this most recent upgrade, the total number of assets in Binance’s PoR system has increased to 24, with a combined worth of more than 63 billion dollars.

The Proof of Reserves (PoR) mechanism that Binance has developed is intended to give its customers with both transparency and certainty about the safekeeping of their funds. Binance claims that its Proof of Reserves (PoR) makes use of Merkle trees to add up the data that is stored on the chain. This helps to guarantee that customers’ assets are retained for them on a one-to-one basis.

The adoption of the Proof-of-Reputation (PoR) approach by other cryptocurrency exchanges comes at the same time as Binance’s Proof-of-Reputation (PoR) system is being expanded to include other coins. This comes as a direct result of the failure of FTX, which brought to light the need of more openness within the cryptocurrency sector.

Nevertheless, a number of specialists have cautioned that the PoR technique has a number of drawbacks. For instance, it does not give any information on the use of leverage, collateralization, or the proof-of-liabilities that correlate to these concepts. This information may only be disclosed if the PoR is accompanied with financial documents that detail the company’s financial position.

Binance released a significant improvement to their PoR system in February 2023, which included the incorporation of zk-SNARKs. This is an example of a zero-knowledge proof, which is a kind of proof that enables the verification of data without disclosing the data itself. According to Binance, this will result in an improvement in the level of privacy and security afforded to user data during the verification process.

In conclusion, the incorporation of 11 more tokens into Binance’s Proof-of-Residence (PoR) system is a step in the direction of improved user confidence and visibility. Nevertheless, it is essential to keep in mind that the PoR approach is not without its flaws, and users should always proceed with extreme care whenever they engage in the usage of cryptocurrency exchanges.

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Tagged : Assets / Binance / Cryptocurrency Exchange / News / Proof Of Reserves / Transparency

Proof-of-Reserves Becomes a Burning Issue amid FTX Crisis

by Blockchain NewsNovember 10, 2022

The collapse of FTX, one of the leading crypto exchanges, sent shockwaves in the digital asset space.

With the liquidity issue being a primary contributor to the FTX crisis, the proof-of-reserves concept has engulfed the crypto sector, with more exchanges gearing towards showing more transparency. Crypto exchange Gate.io explained:

“What is Proof-of-Reserves? An audit by a 3rd party ensuring that a custodian holds the assets it claims to. A snapshot of all balances held is taken & aggregated into a Merkle tree, a privacy-friendly data structure encapsulating balances.”

As a data structure, a Merkle tree or Hash tree prompts data verification and synchronization. Therefore, it utilizes hash functions for data integrity and transparency purposes.

Binance CEO Changpeng Zhao (CZ) prompted the proof-of-reserves trend after pointing out that it would propel the crypto exchange’s transparency about its digital asset holdings. He stated:

“All crypto exchanges should do merkle-tree proof-of-reserves. Banks run on fractional reserves. Crypto exchanges should not. Binance will start to do proof-of-reserves soon. Full transparency.”

Market analyst under the pseudonym Tajo Crypto said:

“After the incident with FTX, CZ Binance introduced proof-of-reserves to help users know exactly how exchanges are handling their funds and prevent bank runs. Many exchanges quickly embraced the proof-of-reserves concept and promised to be more transparent.”

Binance published its latest proof of assets, which includes over 125,000 Bitcoins and 9,900 Ethereum and 1,250,000,115 Tether tokens. Meanwhile, Crypot.com said its company will be publishing its audited proof of reserves, CEO Kris Marszalek said in a tweet, noting that transparency is more important than ever in this critical moment for the industry, according to Bloomberg.

The rain started beating FTX based on its lack of crypto reserve transparency. Therefore, the proof-of-reserves seeks to inform the general public, especially depositors, if deposits match user balances.

Lucas Nuzzi, the head of research & development and CoinMetrics, acknowledged that FTX’s bailout of its research arm, Alameda, has come back to haunt the exchange. He said:

“I found evidence that FTX might have provided a massive bailout for Alameda in Q2 which now came back to haunt them. 40 days ago, 173 million FTT tokens worth over 4B USD became active on-chain. A rabbit hole appeared.”

Source: LucasNuzzi

On his part, market insight provider Nic Carter believes proof of reserves coupled with proof of liability equates to proof of solvency. He pointed out:

“Proof of Reserves is the idea that custodial businesses holding cryptocurrency should create public facing attestations as to their reserves, matched up with a proof of user balances (liabilities). The equation is simple (in theory): Proof of Reserves + Proof of Liability = Proof of Solvency.”

Meanwhile, Binance has revealed that it will not proceed with its acquisition of FTX, Blockchain.News reported.

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Tagged : Crypto Exchange / CRYPTO RESERVE / Cryptocurrencies / FTX / Industry / Proof Of Reserves / Transparency