The top two crypto trading platforms in terms of proof of reserves scores were Kraken and BitMEX. Due to shortcomings, Binance ranks low.
Bitcoin supporter Nic Carter has ranked the attestations supplied through well-known crypto trading platforms. He further published an in-depth review of centralized exchange proof-of-reserves.
From various exchanges, Carter published a thorough analysis of the proof-of-reserves (PoR). The cryptocurrency executive employed criteria. These include attestation to assets held and a declaration of liabilities. It further incorporates a third-party auditor. This establishes credibility by taking a PoR for all assets. Thus, it commits to a continuous process to identify which ports are of the highest quality.
The top two cryptocurrency trading platforms were BitMEX and Kraken. Carter claims that Kraken, which used Armani for its PoR, provides clients with a “good level of assurance.” No existing hidden liabilities offer it. Carter also commended the trading platform for sticking to its promise to conduct proof of reserves every six months.
However, BitMEX also earned plaudits and opted for a highly transparent model. It did not rely on an auditor. Regarding assets, the exchange provided a list of all BTC amounts it currently possessed. They also gave evidence that they can use BitMEX to spend them. The company released the complete Market tree of user proportions and its obligations. Carter noted that anyone could verify the responsibility set as a whole. Thus, there are no problems with excluded or adverse amounts.
Many CEX had high PoR scores, while Binance had poor rankings. Carter asserts that the exchange’s poor score is due to the PoR’s deficiencies. Binance CEO Changpeng Zhao (CZ) underlined the significance of PoRs following the FTX collapse. Yet the cryptocurrency analyst thinks the executive “hasn’t yet risen to his challenge.”
Carter stated that even though PoR enables individual users to confirm their inclusion in the responsibility set, the PoR does not display the whole liability list. According to the expert, this makes it hard for a third party to verify the technique.
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