- On November 11, Binance became the first Exchange to provide all its data for provisional Proof of Reserve
- Any user can Check the financials of Coinbase
- Bitfinex is one of the biggest holders of Ethereum and Bitcoin
FTX dropped from being one of the largest crypto exchanges to filing for bankruptcy within several days. The crypto world was shocked and disappointed after that crash, and over 1 million FTX users were sent into disarray. Although the whole of 2022 was not good for the crypto sector, the sharp crash increased the level of distrust of the users on the exchanges.
There were many reasons for the abrupt failure of FTX. Nonetheless, no proper reserve to back the firm is considered the main cause of the failure. The firm had more expenses than the reserve had, but nobody knew about it since the firm was showing Proof of Reserve to the users. Investors and crypto users began doubting other top exchanges too.
Major Crypto Exchanges And Their Proof Of Reserves
Before commenting on the number of exchanges that have shared their Proof of Reserve, it is important to know about the concept of Proof of Reserve. Proof of Reserve is a strategy in which the exchange, lender, and other custody provider use Proof of Reserve to certify their solvency and guarantee that all user balances are backed 1:1 by exposed assets.
Here are some of the top exchanges that have published their Proof of Reserve.
After the abrupt failure of the FTX exchange, Changpeng Zhao was the first one, who on November 8, 2022, in a tweet, urged the crypto sector to share a Merkle tree Proof of Reserve with their users to get their trust back. On November 11, Binance became the first exchange to offer its provisional Proof of Reserves to its users. That was a great step for other exchanges to follow.
It is the second biggest exchange by volume and became the second to share how and where they use their funds. The crypto exchange went a bit deeper and any user can now check the financials of Coinbase.
Kraken crypto exchange distinctly shares its Proof of Reserve. It does not share its wallets and balance publicly but enables its users see whether their funds are safe or not. That can be easily checked using a simple tool, and you can take a snapshot of your audited account.
Gate.io is one of those rare crypto exchanges that always share its Proof of Reserve. It shared its Proof of Reserve back in May 2020 and then in October 2022.
One of the top-running crypto exchanges, Bitfinex, shared its Proof of Reserve on November 11, 2022. The reserve shows that the crypto exchange is one of the biggest holders of both Ethereum and Bitcoin. Bitfinex also followed the steps of Coinbase and Binance and shared its Proof of Reserve after the FTX crash.
After the FTX crash, there were many rumors about Huobi’s insolvency. However, Huobi exchange quickly shared its full Merkle Tree Proof of Reserve and assured all the users that their funds were safe with them. Moreover, it confirmed to the users that its security is heightened and promised not to withhold their withdrawals.Buy Bitcoin Now
Crypto.com has become the latest exchange to share its entire Proof of Reserve. It shared its transparency report on November 11 and promised to share the Proof of Reserve on November 25, 2022. However, due to some technical issues, it shared the Proof of Reserve in the second week of December 2022.
Although the exchange has not given the full Proof of Reserve, it offers the list of all those Bitcoin and Ethereum that the exchange has. Nonetheless, the crypto exchange is now planning to hire an auditor to offer full Proof of Reserve.
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