Bitget's Crypto Exchange Reserves Are Twice As High As Users' Assets
Date: 2023-07-14 Author: Karina Ziganova Categories: BLOCKCHAIN, CRYPTO PAYMENTS
Cryptocurrency exchange Bitget reported that the coefficient of its reserves was 223%. This means that the platform stores more than twice the amount of cryptocurrency in the amount of users' assets.
As of July 11, Bitget's reserves amounted to $1.44 billion in 31 digital assets, the list of which is not specified. The team also stressed that more than 200% of the total assets of users are always stored on the balance sheet of the exchange. This is how the platform ensures that users' money remains safe
In addition, the exchange introduced a new feature - "Merkle Validator". The tool helps users independently audit their accounts to make sure that their money remains on Bitget's balance.
"We will continue to provide proof of reserves, stimulating confidence in our platform. Bitget also aims to set higher standards across the industry by partnering with exchanges and advocating for radical transparency," said Bitget Managing Director Gracie Chen.
The Race to Prove Reserves
The collapse of the FTX cryptocurrency exchange in November 2022 raised concerns among users about the safety of their money. After the bankruptcy of the platform, it turned out that its founder, Sam Bankman-Fried, arbitrarily disposed of clients' money, covering the losses of his other firms.
This has led to the fact that many centralized platforms, one after another, began to publish Proof-of-Reserves. One of the first was the largest crypto exchange Binance — for this, the platform attracted a third-party auditor. In addition, the report on reserves was published by crypto exchanges OKX, Bybit, Bitget, Crypto.com and others.
Questionable reserves
However, many experts question the proof of reserves. For example, the Public Company Accounting Oversight Board (PCAOB) warned investors against relying too much on these reports. According to the PCAOB, such proof of reserves is just a snapshot that says nothing about the liabilities of crypto companies.
Moreover, a Bloomberg study showed that 31 of the top 60 companies in the cryptocurrency industry have undergone a financial audit or provided proof of reserves. However, about half of the surveyed businesses now engage an independent auditor to assess their finances.
