Quote from: pooya87 on November 19, 2022, 09:04:33 AM

The problem is with the site you posted in your first post, they don't know all the addresses of each exchange so they have no way of knowing how much coins each one actually has. They go with what is publicly known and that is what the exchange wants them to know!
So for example if Binance wants us to know they have 100k bitcoin, that is what they put in their publicly known addresses and if they want us to know they have 500k (proving they are solvant) they increase its balance.
It is sometimes done in competition with other exchanges too. For example Binance wants to look bigger than KuCoin so they show more of their balance, if they want to evade taxes they reveal less of their balance!

People are stupid and it is proven every time something like this happens. The people who got burnt on ftx probably got burnt on mt gox. I think in the next couple of months will be the battle of proof of reserves. I would not be surprised if the exchanges go into debt to buy more 'proof of reserves' and try to convince the people looking for another exchange coming from ftx to join their platform.

If you have Binance that has $500,000 in reserves and Kraken that only has $300,000 in reserves (made up numbers as example) most people will see that and will go for the one that has more proof of funds and since they are looking for a exchange anyway it is good business to invest money into improving your proof of reserves even if it is only for a short time. This could lead to more exchanges fallen in the future if they have over invested trying to compete and do not get the return.