Re: Are exchanges evading proof of reserves unsafe for users?
Proof of reserves is designed to get exchanges demonstrate transparency by proving that customers deposits are safe in their possession. In an industry riddled with uncertainties and fraud, the need to reassure investors that their funds are safe cannot be overemphasised.
In a bid to raise transparency and trust in cryptocurrency exchanges Proof of reserves allows customers and auditors to indeed verify that exchanges retain the funds they deposited in them.
Unfortunately only a handful of exchanges currently offer any kind of proof of reserves for their customers; while some cite security, cost and competitive disadvantages for their failure to release their proof of reserves, the bold ones have gone on to release theirs.
As a trader, do you feel safe using such exchanges that haven’t released theirs or should the more transparent ones be given preference?
In a bid to raise transparency and trust in cryptocurrency exchanges Proof of reserves allows customers and auditors to indeed verify that exchanges retain the funds they deposited in them.
Unfortunately only a handful of exchanges currently offer any kind of proof of reserves for their customers; while some cite security, cost and competitive disadvantages for their failure to release their proof of reserves, the bold ones have gone on to release theirs.
As a trader, do you feel safe using such exchanges that haven’t released theirs or should the more transparent ones be given preference?
You see that proof of reserve thing, it doesn't prove anything. Last year when the famous clown and FTX collapse, it begin to raise many questions if exchanges have coins on there wallet as they say to the public and then, the whole crypto community began to panic, follow by many FUD that started on Kucoin and then to Crypto.com exchange, so many people withdraw there exchange and when they found out that the rumours has done damages, finance announce their audit and wallet balance just to mitigate the damages but guess what Crypto.com exchange did. They went to borrow money from Gate exchange and show as proof of reserve only to secretly move out the usdt back to Gate exchange they were caught by chain analysts and mini onchain FBIs on twitter.
The earlier you accept that your coins are not safe on the exchange the better for your health, you will have peace of mind and enough time to sleep. Many who left there savings on FTX are still hurt today because they never listen to "not your keys, not your coins". Proof of reserve open the eye of the public in 2022 but some of them were very foolish to withdraw their coin from other exchange and then sent to Binance thinking CZ will protect them, pathetic right!
