Binance to Provide Proof-of-Reserves Following FTX Bust – Other Exchanges to Follow Suit?

Crypto Update
6 Min Read

- Advertisement -
Source: Binance/Instagram

major crypto exchanges Binance will follow get.io ‘sand KrakenTake for example and start doing more proof-of-reserve (PoR) audits, CEO Changpeng Zhao said.

Zhao, known as CZ, tweeted Arguing on Tuesday evening (UTC time) that Binance will start doing proof-of-reserve “soon”:

“All crypto exchanges should do Merkle-tree proof-of-reserve. Banks run on fractional reserves. Crypto exchanges should not.”

This could be another boost for other exchanges to follow suit.

Kraken co-founder and former CEO Jesse Powell Told that he expects “consumers to come to demand regular proof of reserve audits,” arguing that, while it is not 100% foolproof,

“The more times you have to prove it, the harder it is to hide a problem.”

Kraken, as announced The company, earlier this month, completed its “half-annual” POR audit.

It urged users to check whether their exchanges undergo proof-of-reserve audits, adding that Kraken regularly does so to enable its users to verify that their exchanges on Kraken The retained balance is backed by real assets. “Don’t believe it, verify your balance now,” it wrote,

Also, in an announcement shared with cryptonews.comGate.io said it would open up its patented PoR verification method “in an effort to adopt transparent operating procedures among mainstream crypto exchanges.”

Gate.io said it became the first mainstream exchange in 2020 to openly submit to an independent third-party audit to demonstrate its proof-of-reserve. The audit was conducted by. Armanino LLP,

Lin Han, Founder and CEO of Gate.io, said that,

“As the industry’s first exchange to offer Proof-of-Reserve using Merkle Trees, Gate.io will expose our technical solutions and open source the code to be used for free to the entire industry. In the process we would like to assist peers who are preparing for their own similar verification method, sharing the knowledge we have gained over the past two years by offering proof-of-reserve verification.”

What is Proof or Reserve (PoR)?

as a kraken telling This, POR is an independent audit conducted by a third party that aims to ensure that a custodian claims to hold assets on behalf of his clients.

The procedure is as follows – Auditor:

  • takes an anonymous snapshot of all held balances and aggregates them into a Merkle tree, or a data structure that contains all client balances;
  • receives a Merkle root, which is a cryptographic fingerprint that identifies the combination of balances;
  • collects digital signatures produced by the exchange, which prove ownership of an on-chain address with a publicly verifiable balance;
  • Compares and verifies that these balances exceed or match the client balances shown in the Merkle tree – meaning that the client’s assets are held on a full-reserve basis.

The exchange said

“Any client can independently verify that their balance was included in a Proof-of-Reserve audit by comparing selected pieces of data with those of the Merkle root. Any changes to the rest of the data, however small, will be passed to the root. will affect – thereby making the tampering evident.”

legitimate concerns

The cryptoverse is experiencing a long and unprecedented turbulent period with both markets and companies, especially exchanges and various protocols, taking a significant hit. The latest wave of uncertainty and, for many – came as a surprise FTX – Binance turn.

Pascal Gauthier, CEO and President, Hardware Wallet Maker Ledgercommented that,

“If one of the world’s largest centralized exchanges ends up in financial difficulties, people have a valid reason to worry about the security of their digital assets. This is an honest, industry-wide take on the importance of crypto custody. It’s reckoning time.”

It remains to be seen whether more exchanges that do not currently operate PoR will start doing so.

More responses:

,

,

,

,

,

learn more:
, BREAKING NEWS: Crypto Prices Spike Crash As Binance Moves To Gain FTX
, Binance CEO Reveals The Main Reason For Investing $500 Million In Elon Musk Twitter Deal

, Kraken rejects SEC
, Jesse Powell steps out of Kraken CEO position, COO Ripley to take over the reins



Bitcoin Crypto Related Post

Share this Article
Leave a review

Leave a review

Your email address will not be published. Required fields are marked *

adbanner