The fall of FTX has spurred crypto exchanges to show proof of their solvency, and OKX has become one of the first to release a Proof-of-Reserves (PoR) page on their platform, the company said in a press release on 23 November.
According to the announcement, the new page will grant users a greater visibility into the exchange’s assets by giving them a brief summary of OKX’s reserves and liabilities. The page also has a feature that allows users to verify that their own assets are backed 1:1 on the platform. OKX’s director of financial markets, Lennix Lai, said in a statement:
“Our new proof of reserves page and self-audit feature give users the ability to verify that their assets are 100% backed. Third-party audits are also being conducted to provide additional reassurance on top of this. We believe that a far greater degree of transparency needs to be brought to our industry to allow us to build back stronger after recent events.”
The new tool features support only for Bitcoin (BTC), Ether (ETH), and Tether (USDT), but OKX noted it is working on adding more assets to the list over time. The latest snapshot on the PoR page indicates that OKX has 102% of BTC, 102% of ETH, and 101% of USDT needed to handle all withdrawals in these assets.
The self-audit tool gives users the ability to login and verify that their assets are backed by reserves based on data provided by the most recent snapshot. For its more doubtful clients, OKX has also provided an explanation on how users can manually check that their assets have become a “leaf” in the Merkle tree data structure, and how to compare their balances to publicly available blockchain data.
The exchange also revealed it will soon be launching an Independent Custodial Wallet service for its institutional and high-net worth clients, which will allow them to secure their assets separately from OKX’s reserves. It will also give them greater control over their assets by allowing them to view and track their wallet balances in real0time, as well as hold the private keys to their funds.
OKX is not the only crypto exchange rushing to release proof of their reserves following the collapse of FTX, which experienced a liquidity crunch on 8 November, and later filed for bankruptcy. In response to the event, OKX, Binance, KuCoin, Gate.io, Bitmex, and Kraken all declared that PoR pages are needed to increase transparency and trust in the market.