Kraken CEO Responds to Binance: Proof of Reserve is Useless
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Answer Kraken CEO Responds to Binance: Proof of Reserve is Useless
Jesse Powell, CEO of Kraken, has criticized Binance, calling its proof of reserve pointless because it lacks a platform. Proof of commitment.
After the failure of the FTX cryptocurrency trading platform, it was discovered that FTX had lent a large portion of its clients’ assets according to private bankruptcy filings.
As a direct result of this, prominent trading platforms have been scrambling to reassure users about proof of their reserves and to promote transparency in the market.
Binance launches Proof of Reserve feature:
Binance was one of the first cryptocurrency exchanges to unveil Proof of Reserve, and it wasn’t long before many other crypto firms followed suit.
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However, this previous reserve proof was nothing more than cold wallet balances belonging to the trading platforms.
With Binance finally releasing a “Merkle Tree” proof of cryptocurrency backup, Binance has attempted to set an industry standard.
Jesse Powell responded on Twitter criticizing Binance’s move, saying:
I’m sorry but this is not a Proof of Reserve PoR.
This is either ignorance or willful misrepresentation.
The Kraken CEO went on to state that the primary goal of the transparency announcement is to understand whether the cryptocurrency exchange has more cryptocurrency in custody than it owes to its clients.
“CZ” replies:
In response to Jesse’s remark, CZ noted that cryptocurrency owners refer to each other publicly and he thinks they are beneficial to a healthier crypto environment.
Read:If you intend to buy bitcoin soon… beware of this fraudulent platform
While releasing its reserves to the public, Binance announced that it will initially start with its bitcoin holdings, and will add additional tokens and networks in the coming weeks.
CZ also mentioned that the inclusion of third-party auditors is currently in the works.
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