Crypto.com has become the latest exchange to give clients a snapshot of its reserves holdings, as the crypto industry looks to calm jittery investors after the stunning implosion last month of FTX, one of the world’s largest exchanges.
The inclusion of the so-called “proof-of-reserve” page by Crypto.com marks a new transparency push by the crypto industry as its attempt to show clients an ability to withstand turmoil roiling financial markets this year, hitting the crypto industry particularly hard.
Crypto.com was ranked a top-20 crypto exchange by trading volume by CoinMarketCap, which pegged daily transactions at about $ 180 million on Friday. The platform still might be best known for buying the Staples Arena in Los Angeles for $ 700 million in November 2021 and working with Matt Damon last fall.
According to the website, crypto.com has 102% of the bitcoin BTCUSD, +0.23%, 101% of ether ETHE, -4.64%, and 102% of the USD Coin needed to process withdrawals.
Last month, Binance also launched a proof-of-reserves system that appears to show that the exchange has the funds to fully cover its users’ assets.
“Providing audited Proof of Reserves is an important step for the entire industry to increase transparency and begin the process of restoring trust,” said Kris Marszalek, CEO of Crypto.com, in a statement.
Proof-of-reserves is designed to allow users to verify assets held within a platform. The verification is done by a third-party who takes an anonymized snapshot of the client’s balances and aggregates them into a graphic. The shortcoming, however, is that it only shows a snapshot in time, and not an ongoing, live update. It also only shows blockchain data, but doesn’t show any activity that’s happening off the blockchain within the firm, meaning not all funds are transparent.
Bitcoin, the world’s largest digital asset, was down -63.03% on the year so far, according to CoinDesk.