Kraken CEO Calls Binance ‘Proof Of Reserves’ Pointless

Kraken-CEO-Calls-Binance-Proof-Of-Reserves-Pointless
  • Kraken CEO, Jesse Powell has called Binance’s ‘Proof Of Reserves’ pointless.
  • Binance also replied to Kraken CEO Who Criticized its PoR.
  • Other firms have also followed suit to provide their Proof of Reserves.

Jesse Powell, CEO of Kraken, attacked Binance, saying that their “proof-of-reserves” was useless since it lacked “proof-of-liabilities.” It was uncovered that FTX had lent out a large portion of its clients’ assets as per their bankruptcy papers after the bitcoin exchange FTX failed. 

Notably, famous exchanges have been rushing to reassure users about their proof-of-reserves and promote market transparency as a direct result of this. 

One of the first cryptocurrency exchanges to disclose its proof-of-reserves was Binance, and many other companies soon followed. These previous proofs of reserves, however, were nothing more than the contents of the exchange’s cold wallet accounts.

Binance attempted to create a standard for the sector by eventually releasing its Merkle Tree proof-of-reserves with cryptographic evidence. However, Jesse Powell criticized Binance’s reserves on Twitter, writing:

“I’m sorry but no. This is not PoR. This is either ignorance or intentional misrepresentation.”

The CEO of Kraken continued by saying that the goal of being open and transparent was to determine whether a cryptocurrency exchange has more cryptocurrency in its possession than it owed to its customers.

In reaction to Jesse’s statement, CZ pointed out that it was “in crypto” that exchange owners openly called one other out. He also believed that this was advantageous for a more positive crypto atmosphere.

While releasing its reserves to the public, Binance announced that it would initially start with its Bitcoin holdings. They also will add additional tokens & networks in the coming weeks. Zhao also mentioned that the inclusion of third-party auditors was currently in the process.

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