Crypto.com, other crypto firms to share proof of reserves

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Crypto.com, other crypto firms to share proof of reserves

After the collapse of the FTX, Binance, Crypto.com and other major crypto firms pledged to publicly share proof of reserves, indicating that they wanted to increase consumer trust in their platform by revealing a full audit of their coins.

How smart money is playing the game of criptocurrency.

The proof of reserves of the world's largest criptocurrency exchange was unveiled on November 25 and said an audit of other coins would be done in the next few weeks.

The company has 582,485Bitcoin in reserves and users' net balance is 575,742Bitcoin and Binance has funds that cover all of our users' assets 1: 1, as well as some reserves, showing a reserve ratio of 101%.

The company is planning to bring in third-party auditors to review their proof-of- reserves to provide details on the net balance, equity and debt of each user of a criptocurrency, according to a report by the company.

Binance will implement ZK-SNARKs, or zero-knowledge succinct non-interactive argument of knowledge proofs to demonstrate that customers have enough additional assets to provide collateral for funds, indicating that the total net balance of each user was not negative.

For now, users can check the accuracy of the figures through an independent method. For those who want to go a step further and independently verify their funds, they can copy the source code into a Python application and cross reference it themselves. However, despite the disclosures, Kraken CEO Jesse Powell said that Binance has not yet offered a comprehensive proof-of- reserve audit, which ideally would map out total client liabilities, and give customers a way to verify that each account is part of that total, and provide signatures showing that Binance maintains control over the specific wallets cited in the total. Without disclosure of liabilities, Powell said that a statement of assets is pointless. In a conference in Indonesia earlier this month, Binance CEO Changpeng CZ Zhao said that the industry needs to safeguard investor funds and boost investor confidence. That is absolutely going to be where the focus is for the next few months, which is right, he said. We have learned from our mistakes. This is a critical moment for the entire industry, said Kris Marszalek, CEO ofCrypto.com, who said there are still trustworthy platforms in the aftermath of the FTX debacle. Transparency is more important than ever, and the safety and security of users and funds remains the priority. It requires full and collective commitment. After FTX fell from grace, CEOs like Marszalek hope to send a strong message to the world that there are trustworthy platforms for cryptocurrencies.

William Quigley, co-founder of Tether, told TheStreetCryptocurrencies that FTX's collapse will cause investors to ask more questions about their debt, internal risk management controls, and use of collateral pledged against loans.

Tether released its quarterly attestations earlier this month. The company said it was unrelated to the FTX collapse.