Home » The fallout from the collapse of FTX has led to calls for greater regulatory oversight of the crypto market.

The fallout from the collapse of FTX has led to calls for greater regulatory oversight of the crypto market.

Proof-of-reserves: Can reserve audits avoid another FTX-like moment? Proof-of-reserves: Can reserve audits avoid another FTX-like moment?
Business / Crypto

Proof-of-reserves: Can reserve audits avoid another FTX-like moment?

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In the wake of the FTX collapse that came about as a result of the now-bankrupt cryptocurrency exchange funneling user funds to mitigate its own risks, crypto exchanges came up with a transparency solution called proof-of-reserves.  A practice, which was recently endorsed by Binance CEO Changpeng Zhao, offers a way for exchanges to show provide transparency to users in the absence of clear regulations. All crypto exchanges should do merkle-tree proof-of-reserves. Banks run on fractional reserves. Crypto exchanges should not.@Binance will start to do proof-of-reserves soon. Full transparency. — CZ Binance (@cz_binance) November 8, 2022 Proof of reserves (PoR) is an independent audit conducted by a third party that seeks to ensure that a custodian holds the assets it claims to own on be...