OKX and Kucoin says proof of reserves gets available in a month

New York City: As a result of the liquidity issue that was caused by FTX, two of the largest cryptocurrency exchanges have made the announcement that they would give Proof of Reserves, which is also known as Proof of Funds (PoF), within the next month.

OKX announced their plans to hire Armanino for auditing and promised to provide an auditable Merkle POF as soon as possible in an official tweet. After thereafter, the business published a list of addresses holding part of the exchange’s reserves, including 23 Bitcoin addresses and 13 Ethereum addresses.

Proof of Reserves is a method that several cryptocurrency exchanges use in order to demonstrate that they have sufficient funds to process all withdrawal requests. A trustworthy third-party auditor will record the current balances of all of the customers and then transform those balances into a cryptographic Merkle Tree. This makes the data anonymous in order to safeguard users’ privacy, but it also gives users the ability to evaluate the total balances held by consumers in comparison with the total assets owned by the exchange.

Although Kraken, Bitmex, Gate.io, and many other exchanges utilize protocols that are comparable, FTX did not use any of these protocols. Recently, CZ of Binance claimed that all exchanges should give proofs of funds in order to ensure that an exchange is not making use of “fractional reserves.”