- Two more exchanges have signed up to the ‘proof of funds’ movement
- OKX and Kucoin have said they will publish their holdings in the coming weeks
- Some exchanges already do this, but there is a call for all exchanges to do so following the FTX collapse
Two more cryptocurrency exchanges have signed up to the ‘proof of funds’ movement designed to increase transparency in the crypto exchange landscape in the wake of the FTX disaster. In a sign that the space has the capacity to (eventually) regulate itself, Kucoin and OKX added their names to those of Binance, Coinbase and USDC issuer Circle to commit to a system where their reserves were made public in an attempt in address the mistrust that has bred in the space following the collapse of exchanges and lending platforms this year.
CZ Kickstarts Movement, Promising “Full Transparency”
The proof of funds movement is already in place for some exchanges, such as Kraken, Bitmex, and Gate.io, but the FTX affair has prompted exchange owners to take a firmer stand on the matter.
Binance CEO Changpeng Zhao broached the idea on Monday when the initial suggestion of an FTX takeover was mooted, suggesting that, “All crypto exchanges should do merkle-tree proof-of-reserves”, something that he said Binance would do “soon”, promising “Full transparency.”
His thoughts were echoed by Coinbase CEO Brian Armstrong and Circle boss Jeremy Allaire, and overnight two more exchanges signed up to the concept. OKX had initially said on Tuesday that it would publish its proof of reserves “in the coming weeks”, calling the movement “an important step to establish a baseline trust in the industry”, but last night it said it was “hiring Armanino for auditing & will publish an auditable Merkle POF asap.”
Kucoin and OKX Sign Up
Kucoin CEO Johnny Lyu added his weight to the movement, saying it would have its own published in the coming weeks:
2/ and work closely with authoritative auditing institutions to ensure the accuracy and truthfulness of the numbers and information we provide to our users and to build confidence and transparency in the industry.
— Johnny_KuCoin (@lyu_johnny) November 9, 2022
The proof of funds movement will certainly help to heal the seismic cracks that have appeared in the trust between users and exchanges following the collapses of Celsius, Hodlnaut and now the seemingly unsinkable Titanic that was FTX.
The healing process will take much, much longer however.