Crypto exchange OKX has released a Proof of Reserves page that allows users to check their reserves to ensure they are solvent. This comes at a time when crypto exchanges are coming under closer scrutiny following the collapse of FTX. OKX announced the new site in a tweet as well as on its blog.
Don’t trust, verify → OKX Proof of Reserves (PoR) is LIVE.
To set a new standard for transparency, risk management and user protection, we launch our first PoR.
You can now check whether your assets are 1:1 secured #OKX ⤵️
— OKX (@okx) November 23, 2022
The Proof of Reserves page offers users two different options to check the exchange’s reserves. The first allows users to get a brief summary of the exchange’s current reserves and liabilities for its three main cryptocurrencies: BTC, ETH, and USDT.
This summary currently shows that OKX has 102% of the BTC and ETH it needs to process all withdrawals in those coins, while it says it has 101% of the USDT needed to process all Tether withdrawals .
The second option is labeled View My Audit. It allows the user to log in and view a snapshot of their balances held on the exchange. The company said these balances should match those found on the asset summary page on the app’s dashboard, unless the user has taken out margin loans.
Some users may not trust the company’s web app to provide them with accurate information. Therefore, the company has also provided two help file documents that explain how to check the reserves using the console on a PC. These documents are titled “How can I verify that your assets are in the OKX Merkle tree?” and “How to verify OKX ownership and balance at the wallet address.”
One of the documents explained how to query the OKX app’s API to get a Merkle tree of customer balances and compare it to balances publicly available on the blockchain. The other explained how users can get a Merkle leaf of their own credits and verify that that leaf is part of the larger tree.
In the press release, OKX Director of Financial Markets, Lennix Lai, expressed the view that this Proof of Reserves page will help bring more transparency to the crypto exchange market:
“Our new reserve evidence page and self-check feature give users the ability to verify that their assets are 100% secured. In addition, third-party audits are performed to provide additional security. We believe that a far greater level of transparency needs to be brought to our industry so that we can rebuild stronger after recent events.”
Crypto exchange FTX suddenly experienced a liquidity crisis on November 7-11, leading to the company behind it filing for bankruptcy. In response to this event, several executives from major crypto exchanges have stated that proof-of-reserves pages are needed to provide transparency so that such an event never happens again.
OKX had previously stated that it would provide proof of reserves “as soon as possible”. Kucoin and Binance have also stated that they plan to submit Proof of Reserves within the next few weeks. Several other crypto exchanges provided proof-of-reserves pages even before the FTX story broke, including Gate.io, Bitmex, and Kraken.