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Two years after FTX collapse, Coinbase still hasn’t implemented Proof of Reserves
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The collapse of FTX in November 2022 continues to serve as a stark reminder of the need for rigorous monitoring of exchange assets. In fact, some of the biggest platforms implemented a Proof of Reservations (PoR) system following the company’s collapse.
This event catalyzed a shift towards transparency, with cryptocurrency exchanges now disclosing more about their reserves and management of user funds. However, Coinbase remains one of the exchanges that did not set out to create this report.
On the other hand, other major exchanges managed to overcome the difficult moment of the fall of Sam Bankman-Fried’s empire. Two years after the FTX collapse, only Bitfinex and Binance have witnessed their Bitcoin reserves grow.
According to the latest report from major exchanges CryptoQuant, Coinbase remains the only one that has not filed a public Proof of Reserve report. Binance was one of the first to adopt this practice.
Exchanges Boost PoR Efforts
Binance, for example, provides PoR of its assets through publicly available on-chain addresses, allowing users and interested parties to verify assets directly. These addresses not only include BTC and Ether (ETH), but also other cryptocurrencies.
Binance’s Bitcoin reserves grew notably by 28,000 BTC (5%) and reached a total of 611,000 BTC. In other words, even amid regulatory scrutiny from US authorities, the exchange is one of the largest holders of BTC on the market.
Among major exchanges, only Bitfinex and Binance have expanded their reserves since FTX’s collapse, with the latter maintaining a reserve drawdown rate below 16%. Platforms like OKX, Bybit, and KuCoin release PoR every month, allowing users to audit their reserves to ensure they are solvent.
While Proof of Reserves reporting has increased transparency on major exchanges, security challenges remain. WazirX, for example, suffered a hacker attack that caused the loss of US$230 million in July.
Recently, the company released its first PoR report following the attack. As expected, the report showed that there was a sharp decline in its reserves, highlighting the ongoing risks that exchanges face.
The report indicates that the exchange has $298.1 in total assets, including on-chain funds, assets held on third-party exchanges, and less liquid assets. The reduction in assets is in line with the company’s ongoing restructuring following the July attack.
Two years after FTX collapse, Coinbase still hasn’t implemented Proof of Reserves
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Two years after FTX collapse, Coinbase still hasn’t implemented Proof of Reserves
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Two years after FTX collapse, Coinbase still hasn’t implemented Proof of Reserves
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Two years after FTX collapse, Coinbase still hasn’t implemented Proof of Reserves
