Proof of Reserves: What It Means for Exchange Trust
The Block·
60-second summary
The crypto industry is shifting towards transparency with the implementation of Proof of Reserves, a measure to verify exchange balances. This comes after FTX's collapse in 2022, where investigators found billions in customer deposits diverted to its trading firm, leaving a shortfall of roughly $8 billion.
The Trust Deficit For most of the crypto industry’s history, users who deposited assets with an exchange simply trusted that the funds were there. FTX ended that complacency when it collapsed in 2022, with investigators finding that billions in customer deposits had been quietly diverted to its affiliated trading firm, leaving a shortfall of roughly […]