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"If you're wondering how exchange proof-of-reserves work, something Binance's CEO Changpeng Zhao recommends CEXs perform, this guide should help."

"A Proof of Reserves (PoR) is an independent audit conducted by a third party which seeks to ensure that a custodian holds the assets it claims to on behalf of its clients. This auditor takes an anonymized snapshot of all balances held and aggregates them into a Merkle tree - a privacy-friendly data structure that encapsulates all client balances."

Nic Carter's dashboard of entities which have conducted a recent PoR attestation

"As the FTX collapse highlighted the urgency for more transparency among crypto exchanges, Chanpeng "CZ" Zhao said Binance is working on implementing a new Proof-of-Reserves protocol developed by the Ethereum co-founder Vitalik Buterin."

All Crypto Exchanges should implement a way to prove a 100% coverage of customer assets (Proof of Reserves). With the transparency of blockchains that is the least they should do. In addition, an audit can provide a complete picture of the financial situation of an exchange. Starting 2023 blockchaincenter.net will only recommend exchanges that do at least a Proof of Reserves.

"With Chainlink Proof of Reserve (PoR), stablecoin protocols are able to enhance their stability and transparency, providing real-time insight into their reserves and boosting user and market confidence."

"The digital asset industry lacks the standards to ensure digital asset service providers hold enough assets to cover customer deposits. Gaps in trust result in lower rates of adoption and higher counterparty risks. TrustExplorer is an objective third-party that instills confidence providers have sufficient digital assets to meet users' liabilities and enables validation that account data was included in the review."

"Overall, the fallout from the collapse of FTX has led to calls for greater regulatory oversight of the crypto market. While key market players continue to offer some form of transparency in order to regain public trust, experts believe proof of reserves alone cannot solely be relied upon."

"Proof of reserves is all the rage on crypto platforms. The idea is that if the platform can prove to its customers' satisfaction that their deposits are fully matched by equivalent assets on the platform, their deposits are safe. And if the mechanism they use to prove this uses crypto technology, that's even better. Crypto tech solutions have surely got to be much more reliable than traditional financial accounts and audits - after all, FTX passed a U.S. GAAP audit. No, they aren't. Proof of reserves as done by exchanges like Binance does not prove that customer deposits are safe. It is smoke and mirrors to fool prospective punters into relinquishing their money, just like claims that exchanges and platforms are "audited" or have "insurance". There are no audits in the crypto world, there is no insurance, and as I shall explain, proof of reserves proves absolutely nothing." [Frances Coppola]

Mazars Group, the accounting firm used by Binance and other big players in the crypto industry to vouch for their assets held in reserve, has halted all such work for crypto clients, because markets haven't been reassured by the proof-of-reserves reports it had published so far. Also, the firm was concerned about intense media scrutiny. However, the suspension is limited to its provision of proof-of-reserves reports, citing "concerns regarding the way these reports are understood by the public."

Proof of reserves (PoR) refers to a method of verifying that a trading platform or crypto firm does indeed have 1:1 backing across the digital assets it holds in custody on behalf of its customers.

"The leaders of "Big Crypto" seem to have a huge problem understanding the basic concepts of conventional finance - such as balance sheets, auditing and cash flows."