Cryptocurrency

Multiple Cryptocurrency Exchanges Intend To Publish ‘Proof Of Reserves’ – Fin Tech


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According to reports, multiple cryptocurrency exchanges have
recently indicated an intent to publish so-called proof of reserves
in an attempt to alleviate market concerns. One major exchange
recently released a list of its hot wallet and cold wallet
cryptocurrency addresses, and several other major exchanges have
committed to publishing proof of reserves, also known as Proof of
Funds (PoF). According to reports, PoF involves an exchange
engaging a third-party auditor to record all customer balances at
the exchange and convert the balances into a cryptographic Merkle
tree, which anonymizes the data. Customers of the exchange are then
able to use the Merkle tree data to compare the total balances held
by customers with the total assets held by the exchange, to gain
assurance that the exchange holds sufficient cryptocurrency funds
to meet customer withdrawal requests. According to reports, two
separate cryptocurrency firms have recently announced solutions
intended to assist exchanges in facilitating and demonstrating PoF
audits. 

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