After the collapse of the FTX, Binance, Crypto.com and other major companies pledged to publicly share proof of reserves, indicating that they wanted to grow consumer trust in their platform by revealing a full audit of their coins.
How smart money is playing the game of criptocurrency.
On November 25, a proof of the reserves of the largest criptocurrency exchange was unveiled by the world's largest criptocurrency on November 25 and said an audit of other coins would be pending in the next few weeks.
The company has 582,485Bitcoin in reserves, and the users' net balance is 575,742Bitcoin, showing a breakdown of the assets held in reserve for their customers, as well as some reserves, showing the reserve ratio of 101%.
The company is planning to bring aboard third-party auditors to review their proof-of- reserves, who will provide information on the net balance, equity and debt of each user of the criptocurrency.
Binance says it will eventually implement ZK-SNARKs, or zero-knowledge 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 using 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. Despite the disclosures, Kraken CEO Jesse Powell said that Binance has not yet offered a comprehensive proof-of- reserve audit, which would ideally map out total client liabilities, give customers a way to verify that each account is part of the 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. The FTX imbroglio has led many crypto firms to champion proof of reserves as a marketing ploy. According to the CEO of Binance, Changpeng CZ Zhao, the industry needs to safeguard investor funds and provide proof of reserves for the next little while, and that is absolutely going to be where the focus is for the next little while, he said. We have learned from our mistakes. The CEO ofCrypto.com, Kris Marszalek, said that this is a critical moment for the entire industry, and that there are still trustworthy platforms in the aftermath of the FTX debacle. Safety and security of users and funds is a priority, and transparency is more important than ever. It requires full and collective commitment. After FTX's dramatic fall from grace, CEOs like Marszalek hope to signal that some companies are still worth believing in: It is incumbent on us to send a strong message to the world that there are trustworthy platforms for cryptocurrencies, he said.
William Quigley, co-founder of Tether, told TheStreetCoins that investors will be asking more questions about their debt, internal risk management controls, and their use of collateral pledged against loans.
Tether released its quarterly attestations earlier this month. The company said it was unrelated to the FTX collapse.