Top 10 Exchanges that have Released Proof of Reserves Audit

On November 11, 2022, FTX, the third largest cryptocurrency exchange based on the volume of trades, voluntarily filed for Chapter 11 bankruptcy. FTX was forced to shutter because it had just $900 million in liquid assets but over $9 billion in liabilities, therefore could not fulfill client withdrawal demands.

This had far-reaching consequences for the sector as a whole, driving Bitcoin (BTC) and other cryptocurrencies to annual lows and leading to the suspension and shutdown of many other victims like Galois Capital, Genesis Crypto, and BlockFi.

While the fall of FTX did highlight the dangers of relying on centralized platforms to store funds, other CEXs have taken steps to re-establish trust in the industry by publicly publishing their Proof of Reserves. Changpeng Zhao, the CEO of Binance, started the movement for complete Proof of Reserves (POR) by asking all cryptocurrency exchanges to show a Merkle tree-based Proof of Reserves to authenticate that they are not operating with a fractional reserve.

Which Exchanges have Adopted the New Proof of Reserves Standard?

After Binance started the campaign on November 10, 2022, many of the biggest cryptocurrency exchanges said they would follow the new Proof of Reserves standard.

As of this writing, most of these marketplaces have either performed a simple audit of their assets or a complete analysis of their digital wallets. Only a few have shown fully auditable Merkle trees.

Some of the most prominent currently include:

Binance

Binance published its preliminary Proof of Reserves on November 11, 2022, making it the first cryptocurrency exchange to do so. The exchange regularly releases proof of reserves reports detailing its holdings of various cryptocurrencies.

Bitfinex

Since 2016, the cryptocurrency exchange Bitfinex has issued periodic proof of reserves reports. The reports include the exchange’s Bitcoin, Ether, and fiat currency holdings and the addresses where those assets are now stored.

OKX

OKX has produced ample proof of reserves and has revealed 23 Bitcoin addresses holding 69,000 BTC and 13 Ethereum addresses containing $2 billion in ETH/ERC20 tokens.

Moreover, the marketplace is commissioning an audit of a Merkle tree-based proof of risk. This is scheduled for imminent publication.

Coinbase

One of the largest cryptocurrency exchanges, Coinbase, has adopted the proof of reserves mechanism. The exchange regularly releases proof of reserves reports detailing its holdings of various cryptocurrencies.

Kraken

Kraken is a digital currency trading platform that uses a proof of reserves method. The exchange regularly releases proof of reserves reports detailing its holdings of various cryptocurrencies.

BitMEX

The BitMEX crypto exchange uses a proof-of-reserves method. The exchange details its reserves for each cryptocurrency in its regularly released “proof of reserve” reports.

Gate.io

When it comes to its reserves, Gate.io has always been forthright. In May 2020 and October 2022, the company produced Proof of Reserves through a third-party audit. But the marketplace went even further by placing its solution for auditing Proof of Reserves on Github.

Huobi

Despite reports that it was about to go bankrupt, Huobi was one of the first trading platforms to provide a thorough Merkle Tree Proof of Reserves audit. It recently promised that user assets would be safe and that user withdrawals would be unrestricted.

Crypto.com

Crypto.com is a leading blockchain product ecosystem and cryptocurrency exchange. By November 25, 2022, the exchange had released a comprehensive and audited Proof of Reserves report. Crypto.com released its first transparency report on November 11, 2022.

Deribit

One of the first crypto derivatives trading platforms to provide Proof of Reserves was Deribit. The exchange periodically publishes proof of reserves reports outlining its various cryptocurrencies.

Conclusion

The number of exchanges committed to publishing their Proof of Reserves in accordance with the new standard is increasing. Users can easily see if their exchange has posted proof of its financial reserves by going to Coingecko’s page for that particular exchange. In a realm where exchanges and stablecoin issuers must regularly confirm their reserves, individuals will use the most secure solutions for their assets. Over time, a safer ecosystem would make it easier for institutional funds to enter the cryptocurrency market and attract more investors.

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