In the wake of the failure of competitor exchange FTX, Crypto.com has emerged as the most recent cryptocurrency exchange to reveal some "Proof of Reserves." Kris, CEO of the exchange, supplied links to a Nansen dashboard that displays more over $2 billion in reserves, illustrating his determination to be honest in the business as concern over crypto contagion from the FTX catastrophe spreads.
He announced that he would be disclosing their cold wallet addresses for some of the biggest assets on the Crypto.com platform while the full Proof of Reserves audit was ongoing.
Interesting Insights Drawn Possibly from Partial Data
According to information posted on Nansen, Bitcoin makes up 30.67% of the total reserves while Ether makes up 17.32%. SHIB, a cryptocurrency with DOGE influences, is where another 19.77% of reserves are kept. The percentage of reserves held in stablecoins like USDC and USDT is only 11.99%.
Kris then added:
“This represents only a portion of our reserves: about 53,024 BTC, 391,564 ETH, and combined with other assets for a total of ~US$ 3.0b”
Please expect a full audited Proof of Reserves from us in the next couple of weeks, confirming the full 1:1 reserve of all customer assets.
— Kris | Crypto.com (@kris) November 11, 2022
Proof of Reserves Origin
After raising the issue of cryptocurrency exchanges using fractional reserves like traditional banks, CZ, CEO of Binance, brought it up again.
He recommended adopting "Merkle Tree Proof of Reserves" as a substitute to maintain openness in the public eye. In actuality, Merkle Trees refers to a data structure that has been cryptographically validated. This method of revealing Proof of Reserves presumably reflects an unalterable audit trail.
Market Response
After Kris revealed his partial disclosure statement regarding Crypto.com's reserves, the native cryptocurrency of the site, CRO, dropped precipitously. At the time of writing, CRO is now trading at $0.085001, down 12.5% over the previous 24 hours.
