Crypto Exchanges With Proof of Reserves

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Contributor, Benzinga
November 30, 2022

Most people would agree that 2022 has been nothing short of a disaster for the cryptocurrency industry. In addition to overall declining prices, the crypto market has been repeatedly crushed by bankruptcies and liquidations, many of which involve big names that are tied to the FTX contagion. 

As users frantically scramble to remove their funds from potentially compromised or insolvent platforms, the time has never been better to discuss Proof of Reserves and why they are important for crypto exchanges. The following discussion will explore which crypto exchanges have Proof of Reserves and what Proof of Reserves means.

Disclosure: eToro supports the following currencies: BTC, ADA, DASH, DOGE, EOS, ETH, LTC, NEO, XLM, XTZ, TRX, ZEC. eToro USA LLC; Investments are subject to market risk, including the possible loss of principal. T&Cs apply. *The bonus is available to Benzinga readers in the US for open states only. Served by eToro USA LLC.

What is Proof of Reserves (PoR)?

Proof of Reserves (PoR) is an independent audit that assesses the assets that an exchange holds in custody for users. It serves as evidence and proof that an exchange has funds that cover all of its user assets 1:1, as well as some contingency reserves. In other words, PoR shows whether customers' funds are safe, meaning that sufficient funds are backing all deposits. 

How Does Proof of Reserves Work?

To provide users with transparency, crypto companies may release periodic PoR audit results or maintain a live reserve tracker on their websites. Audits are completed by third-party auditors that generate a snapshot of all the company’s balances to show transparent proof that the crypto company always has enough assets to cover its liabilities. 

PoR uses blockchain technology to publicly verify the on-chain assets of a crypto company. In technical terms, this process involves a secure data structure known as a Merkle tree – which aggregates the total of all customer balances without exposing private information.

The Merkle root provides access to the complete aggregate data. In short, the Merkle root is a tamper-proof cryptographic fingerprint that auditors can access to verify balance information. The Merkle tree hashing mechanism keeps the data protected and secure from tampering or hacks. This state is achieved by creating incentives to make tampering unprofitable for malicious users.

Why Are Proof of Reserves Important?

Trust is the crux of the cryptocurrency exchange industry. Users place their trust in exchange operators to appropriately manage and protect their crypto assets. 

The collapse of FTX crypto exchange is a perfect example of why trust is important. Prior to bankruptcy and the subsequent contagion, FTX was not transparent with its lack of liquidity during the 2022 bear market. A shockingly high proportion of Almeda Research’s (the company behind FTX) assets were locked (illiquid), meaning that FTX did not have enough available assets to cover its liabilities. 

When Alameda Research’s balance sheet was leaked on Nov. 6, 2022, the lack of liquidity shocked many investors, inciting a run-on-the-bank situation, and eventually leading to FTX filing for Chapter 11 bankruptcy. 

If FTX had periodically published PoR many months prior, many investors could have reduced their exposure to FTX or avoided FTX outright far before its collapse. By having to show their assets and liabilities to the public, FTX would have been disincentivized to act so aggressively in the first place. However, it is important to note that PoR doesn’t give users more control over their funds. PoR increases transparency – exchanges can still choose to inappropriately manage user funds if they please.

Overall, PoR plays a vital role in creating trust between a crypto company and its users. Showing proof of available assets increases customer confidence that they can withdraw their money whenever they choose and that the cryptocurrency company is not at risk of a liquidity crisis. 

Crypto Exchanges With Proof of Reserves

Only a few crypto exchanges have recently published their PoR for the public to see. Here are a few of the leading exchanges that have published PoR.


Binance is the world's biggest crypto exchange by daily trading volume and is trusted by millions of users around the globe. The Binance Exchanges’ native token is BNB, which is the fourth largest cryptocurrency in the world — trailing Bitcoin, Ethereum and Tether. Binance, alongside Paxos, also supports BUSD — a fiat-collateralized stablecoin that is used across multiple trading pairs on the Binance exchange.

In response to the FTX liquidity and bankruptcy fiasco, Binance published its PoR mechanism (Merkle Tree-based PoR). At the time of writing, Binance has started with its BTC reserves; however, it plans to publish PoR for other assets in the near future. The BTC reserves have a reserve ratio of 101%. This means that the company has enough BTC to cover all user balances. is easily one of the best crypto exchanges with proof of reserves and an extremely popular trading platform in general. It supports many more cryptos than most exchanges, charges low fees, and has a great range of features. It offers one of the best cryptocurrency debit cards with it's partnership with Visa and it's token, CRO, has great utility across the platform. recently published a list of its custody addresses which you can see on Coinmarketcap. It even detailed the exact composition of the cryptos it holds. At the time of writing's reserves are just under $3.6 billion in cryptos, not counting the USD on customer accounts. This is helpful information that makes more trustworthy, but it isn't perfect. didn't reveal proof that it's assets outweigh its liabilities.


OKX is a world-leading cryptocurrency spot and derivatives exchange. It is trusted by millions of users, available to users in the United States and offers low trading fees of 0.10% or less for most trades. 

OKX has officially published reserve ratios of its recent holdings to the public. The BTC reserve and ETH reserves both have reserve ratios of 102%, meaning that OKX user assets outweigh OKX user liabilities for Bitcoin and Ethereum. Moreover, OKX has a USDT reserve ratio of 101%, meaning that the company has enough USDT to cover all user balances.

Honorable Mentions:

It is important to note that multiple other large crypto exchanges have recently announced publicly they are conducting PoR verifications. These exchanges include Kraken, KuCoin,, BitMEX, Coinfloor and HBTC. 

Ways to Store Cryptocurrency

Centralized Exchanges — Least Secure

The least safe method of storing your cryptocurrency is on controlled exchanges. This fact is well-acknowledged in the cryptocurrency community. It is for this reason that reputable exchanges like Binance urge customers to keep long-term holdings in self-custodial wallets. It is ill-advised to hold cryptocurrency on exchanges for two main reasons.

Exchanges are responsible for holding onto the crypto (private keys) for all their users. This means that if exchange owners could go bankrupt — as demonstrated by FTX – investors could experience an irreversible loss of funds. Secondly, exchanges are a huge target for hackers. While exchanges take multiple safety precautions and often offer insurance funds, they are not immune to hacks. 

Hardware Wallet — Most Secure

Hardware wallets are universally considered to be the most secure way to store your crypto. They consist of physical devices that store and generate keys without any connection to the Internet and, as such, fall into the classification of cold wallets. These keys are generated based on random number generation (RNG) algorithms and are stored in the device itself. 

Ledger’s hardware wallets are some of the most trusted hardware wallets in the world. Users can choose from the Ledger Nano X wallet ($150) or the Ledger Nano S Plus wallet ($79). Both wallets allow users to store countless different coins and tokens. The service also receives overwhelmingly high ratings for user satisfaction and user-friendliness. 

Final Thoughts

Overall, PoR audits are effective ways for exchange clients to verify the balances they hold are backed by real assets. It aims to increase the transparency of centralized crypto companies in terms of how they manage user assets.

PoR is only as good as its verifier. It is possible for a crypto exchange to lie and a third-party attestor to uphold the lie. Corruption or incompetence are still key counterparty risks associated with PoR and centralized exchanges as a whole. As a result, it is best practice to store cryptocurrency in self-custodial options, preferably in cold storage such as a hardware wallet.

Disclosure: ²Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts
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