{"id":70637,"date":"2022-11-26T16:30:59","date_gmt":"2022-11-26T14:30:59","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=70637"},"modified":"2025-09-08T03:27:07","modified_gmt":"2025-09-08T00:27:07","slug":"jesse-powell-criticises-binances-proof-of-reserves-function","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/jesse-powell-criticises-binances-proof-of-reserves-function\/","title":{"rendered":"Jesse Powell criticises Binance&#8217;s proof-of-reserves function"},"content":{"rendered":"<p>Kraken co-founder Jesse Powell criticised the initiative of the cryptocurrency exchange <a href=\"https:\/\/u1f987.com\/en\/news\/what-is-binance\">Binance<\/a> to provide transparency in the custody of user funds.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">This is simply \u00abhere\u2019s a hash of your record in the BTC spreadsheet\u00bb. ok\u2026 but what\u2019s the point? The whole point of this is to understand whether an exchange has more crypto in its custody than it owes to clients. Putting a hash on a row ID is worthless without everything else.<\/p>\n<p>\u2014 Jesse Powell (@jespow) <a href=\"https:\/\/twitter.com\/jespow\/status\/1596227033046323201?ref_src=twsrc%5Etfw\">November 25, 2022<\/a><\/p>\n<\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u00abSorry, but no. This is not Proof-of-Reserves. This is either ignorance or deliberate deception. <a href=\"https:\/\/u1f987.com\/en\/news\/what-is-a-merkle-tree\">Merkle Tree<\/a> without an auditor to verify that you have not included accounts with negative balances, is just nonsense. An asset ledger is meaningless without liabilities\u00bb, he wrote.<\/p>\n<\/blockquote>\n<p>Powell argued that the whole point of Proof-of-Reserves is to determine whether the platform holds more digital assets than it owes to its clients.<\/p>\n<p>In response to the criticism, Binance chief Changpeng Zhao pledged that it would be audited by independent auditors in the future. He also rejected the inclusion of accounts with negative balances and said he was open to questions and checks.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">And absolutely no negative balances involved. It will be verified in the audit for the above PoR.<\/p>\n<p>Actually the first time I heard about a \u00abnegative balance\u00bb in a PoR. \u00abInnovative\u00bb\u2026<\/p>\n<p>We welcome questions and checks. Let\u2019s build together.<\/p>\n<p>\u2014 CZ \ud83d\udd36 Binance (@cz_binance) <a href=\"https:\/\/twitter.com\/cz_binance\/status\/1596391588380700673?ref_src=twsrc%5Etfw\">November 26, 2022<\/a><\/p>\n<\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Earlier Binance <a href=\"https:\/\/u1f987.com\/en\/news\/binance-launches-proof-of-reserves-feature-for-bitcoin-holders\">announced an update<\/a>, which will allow Bitcoin holders to verify storage by the exchange. In due course the initiative is expected to be expanded to holders of ETH, USDT, USDC, BUSD and BNB.\u00a0<\/p>\n<p>Earlier Binance <a href=\"https:\/\/u1f987.com\/en\/news\/binance-discloses-details-of-its-cryptocurrency-reserves\">disclosed<\/a> information about its cryptocurrency reserves.<\/p>\n<p>Read ForkLog&#8217;s Bitcoin news on our <a href=\"\/\/telegram.me\/forklog\" target=\"\u201c_blank\u201d\" rel=\"\u201cnofollow\u201d noopener\">Telegram<\/a> \u2014 cryptocurrency news, prices and analysis.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kraken co-founder Jesse Powell criticised Binance&#8217;s initiative to provide transparency in the custody of user funds.<\/p>\n","protected":false},"author":1,"featured_media":70638,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[744,193,1138],"class_list":["post-70637","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-binance","tag-kraken","tag-opinions"],"aioseo_notices":[],"amp_enabled":true,"views":"29","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/70637","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=70637"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/70637\/revisions"}],"predecessor-version":[{"id":70639,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/70637\/revisions\/70639"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/70638"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=70637"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=70637"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=70637"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}