Cryptocurrency exchange OKX has released a proof-of-reserves page allowing its users to audit its reserves to ensure they are solvent. This happens when crypto exchanges are under greater scrutiny after the collapse of FTX. OKX has announced the new page in one of its tweets and on its blog.
🚨 Don’t trust, verify → OKX Proof of Reserves (PoR) is LIVE. 🚨
To set a new standard of transparency, risk management and user protection, we’re launching our first PoR.
You can now verify your assets are backed 1:1 on #OKX ⤵️
— OKX (@okx) November 23, 2022
The proof-of-reserves page gives two unique features for users to audit the exchange’s reserves. The first enables users to get a summary of the exchange’s current reserves and liabilities for its top three digital currencies: Bitcoin, Ethereum, and Tether.
This summary clearly shows that OKX has around 102% of the ETH and BTC required for handling all withdrawals in these coins, while it says that it has around 101% of the USDT needed for handling all Tether withdrawals.
The second option is labelled “view my audit.” It enables the users to log in and view a snapshot of their balances held at the exchange. The company says these balances should be equal to those found on the asset overview page in the app’s dashboard unless the user has taken out margin loans.
Some traders may need to trust the company’s web app to give them accurate and trustworthy information, so the company has provided two help file documents explaining how to audit the reserves using the console on a PC.
These documents are titled, “How to verify if your assets are included in the OKX Merkle tree?” and “How to verify OKX’s ownership and balance of the wallet address.”
One of the documents shows how to query the OKX app’s API to get a Merkle tree of customer balancers and compare it to balances publicly available on the blockchain. The other explained how users need a Merkle leaf of their balances and verify that this leaf is part of the enormous tree.
OKX director of financial markets, Lennix Lai, in the press release, showed that this proof-of-reserves page would help bring greater transparency to the cryptocurrency exchange market.
“Our new proof of reserves page and self-audit feature allow users to verify that their assets are 100% backed. Third-party audits are also being conducted to provide additional reassurance on top of this. More transparency needs to be brought to our industry to allow us to build back stronger after recent events.”
Cryptocurrency exchange FTX suddenly went through a liquidity crunch from November 7-11, leading the company behind it to declare bankruptcy. In response to this event, many executives of the major crypto exchanges have said that proof-of-reserves pages are required to prove transparency so that an event like this never happens again.
OKX stated earlier that it would provide proof of reserves as soon as possible. Binance and KuCoin also have stated that they plan to provide proof of reserves within the upcoming weeks.
Many other crypto exchanges had provided proof-of-reserves pages even before the FTX story broke, including Bitmex, Gate.io, and Kraken.