These 2 Exchanges Lead Bitcoin Reserve Growth Since 2022 FTX Collapse

The November 2022 FTX collapse continues to serve as a stark reminder of the need for rigorous asset monitoring. This event catalyzed a shift towards transparency, with crypto exchanges now disclosing more information about their reserves and the management of user funds.

As November 6th marks two years since the collapse, only Bitfinex and Binance saw their Bitcoin holdings rise from the major exchanges.

Major exchanges step up PoR efforts

According to CryptoQuant’s latest report, of the major exchanges, Coinbase remains the only one without a public Proof of Reserve (PoR) report, while others, such as Binance, have adopted comprehensive transparency practices.

Binance, for example, provides Proof-of-Assets (PoA) through publicly available chain addresses, allowing users and interested parties to verify assets directly. It also allows users to check that their individual account balances are included in the exchange’s overall liabilities.

Beyond Bitcoin and Ethereum, Binance includes additional assets in its reserve disclosures, improving market trust and transparency. Binance’s Bitcoin reserves have grown remarkably by 28,000 BTC (5%) to 611,000 BTC, even amid regulatory scrutiny by US authorities in 2023.

Among the major exchanges, only Bitfinex and Binance have expanded their reserves since the FTX collapse, with the latter maintaining a reserve withdrawal rate below 16%. Platforms like OKX, Bybit, and KuCoin release PoRs every month, allowing users to audit their holdings to ensure they are solvent.

WazirX First PoR after cyber attack

While proof-of-reserve reporting has improved transparency on major exchanges, security challenges remain. WazirX, for example, recently released its first PoR report following a July cyberattack, revealing a sharp decline in its reserves and highlighting the current risks facing exchanges.

The report states that WazirX’s total assets, including on-chain funds, assets with third-party exchanges and less liquid holdings, are valued at $298.17 million. The asset reduction aligns with the company’s ongoing restructuring following the July cyberattack that led to the theft of more than $230 million.

As such, WazirX’s PoR provided critical insight into its financial health by verifying that its assets cover its liabilities. By tracking changes in an exchange’s reserves, PoR reports help users and stakeholders gauge an exchange’s ability to responsibly manage funds and respond to crises.

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