On November 24th cryptocurrency platform Binance published its proof-of-reserve statement but the platform has not completely outlined the parameters of proof-of-reserves and the asset side part of the Binance platform has not been showcased in the public domain by the company.
The proof of reserves is considered to be a complete audit which will showcase the total number of client liabilities along with user variable Cryptography proof of all the accounts which includes the sum and the signature of the respective custodian’s control to that Crypto wallet.
The Fall of the cryptocurrency platform FTX in recent times has showcased the importance of proof of reserves of all the cryptocurrency exchange platforms to all the situations like FTX to all the users found in the future. To overcome these solutions, cryptocurrency platforms are coming out with the solution of proof-of-reserve statements in the public domain.
But according to Jesse Powell, who is the CEO and co-founder of Crypto company Kraken, this initiative is considered pointless if these cryptocurrency exchange platforms are not showcasing the liabilities parts of this company along with all the other details of the company.
In recent times, this has been the case with the Binance platform which has showcased all the other details of the platform but has hidden the liabilities part from the public statement of proof-of-reserve.
What is the view of the CEO of Kraken on Binance’s proof-of-reserve?
According to the CEO of Kraken, the proof of reserves must audit the sum of client liabilities along with the user variable cryptographic proof and All this has to be included with the sum and signatures of the custodian’s control for the Crypto wallet.
In this manner, this statement will be considered a complete document for the company’s track record in the public domain. Although the CEO of Kraken has mentioned these measures to showcase the proof of reserves for any Crypto Company. The Kraken Company itself does not allow the verification of its Crypto assets against the liabilities of the company.
On a similar note, the CEO of Kraken, Powell also asked the crypto platform CoinMarketCap to showcase complete proof of reserves as the Crypto platform CoinMarketCap was lacking in showcasing the cryptographic proof of its client’s balanced and wallet controls. Along with this Powell mentioned that these reserves are not a list of wallets of the CoinMarketCap but they are the assets minus liabilities in the CoinMarketCap platform.
After the Binance platform published its proof-of-reserve statements the CEO of Kraken asked the media houses to refrain from all misleading information to the consumers as these media houses have miss understood the concern of proof of reserves and it is time to correctly understand the real motive behind a proof of reserves.