Exchanges must show their credentials – The case FTX It will mark the beginning of a new era in cryptocurrency ? At the level of others platforms in any case, the reactions multiply in the attempt to do so reassure users on the reliability or soundness of the companies in question. And the future solution could be called Proof of Reserve, a concept taken up by the CEO of Binance in a recent statement. Reassure users and investors at all costs with the maximum transparency is the new buzzword for centralized cryptocurrency players. We explain to you.
Avoid a general crisis of confidence in the ecosystem at all costs
The misleading claims of Sam Bankman-Fried not only will it have harmed the unfortunate users of its crypto platform, but it will also have started the confidence general public. The major players in the sector therefore seek to limit damage and as soon as possible.
Changpeng Zhao (CZ), the CEO of Binance, has already taken the lead in proposing that exchanges be able to do this to demonstrate that they have inside Reserve the equivalent of the funds deposited by users. This concept, called Book rehearsals or proof of funds, it could be a solution. Immediately, several platforms such as OK or Kucoin they also announced that they would like to use this tool.
This is howOK posted the following message:
“For OKX, transparency, risk management and consumer protection come first. We are recruiting Armanino for an audit and will publish a Merkle tree as verifiable proof of funds as soon as possible. Here are already 23 BTC addresses (…) and 13 Ethereum addresses (…) as part of our reservations that all users need to check. “
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Reserve a trial as a guarantee for users?
And in the continuation of the message thread, OK in reality it joins the addresses of some wallets held by the platform. This level of transparency is unheard of for a broker and it lives up to users’ fears. Recall that Merkle tree is a term used in the industry to refer to a data structure: accessible to all – gather a large amount of anonymous information that makes it possible compare customer balances with the total balance of the exchange.
The CEO of Kucoin, Johnny Liuhe also made a similar statement, speaking of a stock proof to be delivered within one month. He also mentioned a company ofaudit recognized in the financial community for carrying out audits. Then, he wanted to publish a message of encouragement for the community:
“I would like to express my solidarity with all those affected by the current situation in FTX. Hopefully, everything can be resolved quickly and the industry can get back on track. “
The anxiety of the main actors of the ecosystem to communicate on these various tools allowing to demonstrate their solvency shows to what extent the crisis of confidence it’s real. It will be a long way to rebuild a healthy relationship with customers and here’s why OK, Kucoin and even Kraken have already adopted these new tools. It would still be necessary for the bad news to stop coming out one after the other to see a clearing.
If CZ inspires CEOs of other exchanges, you can trust him! Register quickly on the Binance platformTHE absolute benchmark of the sector (commercial link).
