Crypto.com has released audited evidence on its reservations page showing that the exchange has sufficient crypto assets to support its obligations to clients, according to a Dec. 9 statement on the exchange’s website. The new page shows that Crypto.com has 102% of Bitcoin (BTC), 101% of Ether (ETH) and 102% of USD Coin (USDC) needed to process withdrawals.
Tether (USDT), XRP (XRP), Dogecoin (DOGE), Shiba Inu (SHIB), Chainlink’s LINK (LINK), and Decentraland’s MANA (MANA) were also included in the report, each holding reserves of more than 100%.
https://t.co/vCNztABJoG releases the results of the audited Proof of Booking.
The Mazars Group compared assets held at on-chain addresses explicitly controlled by https://t.co/vCNztABJoG with customer balances via a direct query supervised by an auditor of the production database in December. pic.twitter.com/sXgvIe4ZMV
– Crypto.com (cryptocom) December 9, 2022
According to the statement, Mazars Group, an international audit, tax and accounting firm, conducted the audit as of December 3.
The crypto community has been watching centralized exchanges closely since the FTX crash in November. Crypto.com itself was hit with the crisis, having to briefly halt withdrawals on the Solana Network due to the FTX fallout.
By issuing Proof of Reserves, the Crypto.com team said it hopes to show that it is a good proxy for users’ cryptocurrency assets and can be trusted to process all withdrawals. Chris Marsalek, CEO of Crypto.com explained:
“Providing audited proof of reservations is an important step for the entire industry to increase transparency and start the process of restoring trust. […] Crypto.com is fully committed to providing customers around the world with a secure and compliant means of transacting digital currencies.”
Since some users do not trust the exchange’s reports on their assets and liabilities, Crypto.com’s Proof of Holds page also provides a way for users to self-audit their holds. Users can log into the app and check the assets they had at the time of the review, and they can copy a Merkle hash derived from the balances.
Once a customer has their Merkle hash, they can go to a separate validator page under Mazars control, where they can get detailed proof that their liabilities are part of the larger Merkle tree of the exchange’s audited liabilities.
Mazar claims that their validator page runs an open source version of the Silver Sixpence Merkle Tree Generator software. This means that if the validator page has been tampered in some way with false results, any programmer should be able to detect this by running the program in their developer environment.
Crypto.com is the latest in a series of exchanges to offer Proof of Reserves pages to assuage the concerns of cryptocurrency users. OKX submitted its Proof of Reserves on November 23, though its liabilities have yet to be verified by an auditing firm, and Binance released its Proof of Reserves Audit for Bitcoin on December 7.
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