After the high-profile collapse of the cryptocurrency exchange, FTX in November 2022, the industry began looking for solutions to assure investors that centralized trading platforms are safe. This led to the idea of creating Proof of Reserves (PoR) to show the current state of a given exchange's capital reserves. OKX has just published its tenth consecutive PoR report, showing $10.4 billion in reserves in Bitcoin (BTC), Ethereum (ETH), and Tether (USDT).
OKX Has Announced 10th Consecutive Proof of Reserves
Proof of Reserves is a mechanism that allows cryptocurrency exchanges to demonstrate that they hold sufficient reserves to cover the digital assets owned by their users. This is crucial for maintaining trust and security in an industry often scrutinized for its lack of transparency. A consistent PoR assures users and sets a precedent for other exchanges to follow, elevating industry standards.
OKX's 10th PoR showed balances of $10.4 billion in primary assets, including BTC, ETH and USDT. This makes OKX the only major crypto exchange to release ten consecutive monthly PoR reports to date. The reports also revealed that OKX has maintained a reserve ratio exceeding 100% for ten consecutive months across 22 commonly used digital assets.
???? Hot Off the Press ????We're proud to publish our August 2023 #ProofOfReserves report.This is our 10th consecutive monthly report showcasing ≥100% reserve ratios for 22 assets, including $BTC, $ETH, $USDT, and more!
— OKX (@okx) August 31, 2023
Compared to the previous month, the value of the reserves has decreased. In July's installment of the PoR report, the exchange reported that it held $11.3 billion in reserves. The decline may be due to the low valuations of major crypto assets in dollars. However, reserves have significantly increased since the beginning of the year, when they stood at $7.5 billion in January.
The assets included in OKX's PoR are not limited to BTC, ETH, and USDT. They also include other popular digital assets like USDC, XRP, DOGE, and more. Specifically, the reserve ratios for BTC, ETH, and USDT were 102%, 102%, and 103%, respectively.
84% of OKX Users Think PoR Reports Are Important
OKX conducted two Twitter surveys to gauge the sentiment of the online crypto community regarding the importance of PoR and transparency. 84% of respondents stated that monthly PoR reports are either 'somewhat important' or 'very important,' and 88% emphasized the importance of transparency when choosing a crypto platform. This shows that OKX's focus on transparency resonates well with its user base.
"We asked our community how important PoR and transparency from exchanges are to them, and the results were as expected – users continue to call for monthly PoR and greater transparency," Lennix Lai, the Global Chief Commercial Officer at OKX, commented. "At OKX we take user feedback to heart and will continue to invest in future tools for security and transparency in order to continue earning user trust."
The consistent PoR snapshots have coincided with an increase of 38% in assets under management on OKX. This demonstrates that commitment to transparency and security is not just a marketing gimmick but a business model that adds value to users and the crypto industry.
OKX Moves to Hong Kong and Dubai
In a move to extend its global footprint, OKX, one of the world's leading cryptocurrency exchanges by trading volume, revealed its intention to set up an operational base in Hong Kong earlier this year. The exchange has formed a local subsidiary and was in the process of applying for a license to operate as a Virtual Asset Service Provider (VASP) under Hong Kong's updated Anti-Money Laundering and Counter-Terrorist Financing Ordinance, which has been effective since June 2022.
The exchange has seen a surge in new user sign-ups from Hong Kong, tallying over 10,000 within just a month after the updated regulations were implemented. This comes after OKX's 18-month-long strategic investment in human resources and infrastructure, aimed at bolstering its application for a VASP license in the city.
Concurrently, OKX has secured a Minimal Viable Product (MVP) Preparatory license from Dubai's Virtual Assets Regulatory Authority, as part of its broader expansion plans in the Middle East, which includes scaling up its workforce.
This article was written by Damian Chmiel at www.financemagnates.com.
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