Binance’s proof of reserves is “pointless without liabilities,” according to Kraken CEO

According to Powell, a complete proof-of-reserve audit must include the sum of client liabilities, user-verifiable proof that each account was included in the sum and signatures proving the custodian’s control over the wallet.

The collapse of the FTX showed the importance of proof of reserves.
While exchanges have started sharing wallet addresses to prove the existence of users’ funds, several entrepreneurs, including Kraken CEO and co-founder Jesse Powell, called the practice pointless.
According to Powell, a complete proof-of-reserve audit must include the sum of client liabilities, user-verifiable proof that each account was included in the sum and signatures proving the custodian’s control over the wallet.
Powell continues to call out other players that have missed out on including accounts with negative balances, despite the fact that Kraken’s proof of reserve allows verification of assets against the company’s liabilities.

Powell called out CoinMarketCap for sharing incomplete proof of reserves, as it lacked a proof of client balances and wallet control. Users can use the proof-of-reserves system to verify their assets.
Powell was upset that the system failed to include accounts with negative balances.

“The whole point of this is to understand if an exchange has more in its custody than it owes to its clients. A row ID is meaningless without everything els.”

He asked the media and journalists to refrain from selling it and misleading consumers.
Few community members disagreed with Powell’s need for a trusted auditor.
Changpeng “CZ” Zhao, the CEO of the exchange, shared plans for third-party auditors to audit the exchange’s proof-of-reserve results.

The community supported the reaction from CZ to the worries raised by the CEO.
CZ crippled public discourse on the post that invited questions and checks.
Building a safe concentrated trade was advanced by Vitalik Buterin.
The most ideal situation would be a framework that keeps trades from pulling out investor’s assets without their assent.