The big takeaway from the FTX fallout is how centralized exchanges require more transparency. Current regulatory requirements are insufficient to make that happen, so innovation comes from within the industry again. All exchanges will commit to proof of reserves, and Bitfinex made their list public today.
Bitfinex Displays Public Proof of Reserves
It is common for cryptocurrency exchanges and trading platforms to maintain dozens of wallet addresses. Not just for different currencies but also for various hot and cold wallets for one chain.
In the case of Bitfinex, there are 135 public addresses for anyone to keep an eye on as of today. Of course, some of these wallets were known already, but it is nice to have a complete list.
We are pleased to announce our Proof of Reserves are publicly available on our GitHub https://t.co/pCIreU3nyX
Over 200k #Bitcoin, over 1000 $BTC on #LightningNetwork, over 1.2m $ETH!
— Bitfinex (@bitfinex) November 12, 2022
The proof of reserves by Bitfinex mark a crucial development in the cryptocurrency landscape. It is the first major exchange to commit to this new unwritten standard in the FTX fallout.
Several other platforms already kept public records of addresses and funds to give users and onlookers better transparency. However, many others have yet to commit to such a system – in some shape or form – which can take a few weeks to resolve.
The decision by Bitfinex to host this information on GitHub is also telling. It enables everyone to see who makes changes and when. That should help avoid any wrong information from being distributed to the public.
The big objective is now to maintain this list and add addresses as they become part of the Bitfinex ecosystem. The list can become rather extensive with support for dozens of currencies, tokens, and assets.
As Bitfinex sets the tone for the “era of proof of reserves”, it will be interesting to see which platforms follow suit. OKX and KuCoin have committed to such a system and expect to have it up and running in the next month.
It is an overall positive development following the FTX bankruptcy, although exchanges should have put solutions like these in place years ago.
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