Binance to Provide Proof-of-Reserves Following FTX Bust – Other Exchanges to Follow Suit?
Major crypto exchange Binance will follow Gate.io 's and Kraken's example and start doing Proof-of-Reserve (PoR) audits, said CEO Changpeng Zhao.
Zhao, known as CZ, tweeted on Tuesday evening (UTC time) that Binance would "soon" start to do proof-of-reserves, arguing that:
"All crypto exchanges should do merkle-tree proof-of-reserves. Banks run on fractional reserves. Crypto exchanges should not."
This could be a further boost for other exchanges to follow suit.
Kraken co-founder and former CEO Jesse Powell said that he hopes that "consumers come to demand regular Proof of Reserves audits," arguing that, while, it's not 100% foolproof,
"The more often you have to prove it, the harder it is to hide a problem."
Kraken, as announced by the company, completed its "semi-annual" PoR audits earlier this month.
It urged users to check if their exchange(s) undergoes Proof-of-Reserves audits, saying that Kraken regularly does so in order to enable its users to verify that the balances they hold on Kraken are backed by real assets. "Don’t trust, verify your balance now," it wrote.
Furthermore, in an announcement shared with Cryptonews.com, Gate.io said it would open-source its patented PoR verification method "in an effort to drive adoption of transparent operating procedures among mainstream crypto exchanges."
Gate.io said that it became the first mainstream exchange to openly submit to an independent third-party audit to showcase its Proof-of-Reserves in 2020. The audit was conducted by Armanino LLP.
Gate.io founder and CEO Lin Han said that,
"As the industry's first exchange to offer Proof-of-Reserves using Merkle Trees, Gate.io will disclose our technical solutions and open source the code used to the entire industry for free. In the
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