The world’s second largest cryptocurrency exchange has released details of its second PoR audit. Users can now verify whether their tokens are held in 1:1 ratio by the exchange and compare the data to what is publicly available on the blockchain.
OKX, one of the world’s largest cryptocurrency exchanges by trading volume, has published the second Proof-of-Reserves (PoR) audit on assets held in its reserves. As part of its commitment to show transparency, the company has promised to post monthly PoR estimates on the 22nd of each month.
Users can now self-verify results of the two PoRs on the OKX website using open-source tools. With its latest audit, the crypto exchange has released a new feature that will allow customers to view reserve ratios for new and historical data on its assets. When self-verifying on-chain funds, users can download the files containing both new and historical reserve ratio data. With every publication, clients will be able to compare the latest with the oldest available audit for more transparency.
“Publishing PoR results on a monthly basis strengthens our commitment to lead the industry when it comes to transparency and trust. At OKX, we believe that PoR should be verifiable via open source tools so that users can self-verify the balances and ownership of our reserve addresses,” said Haider Rafique, CMO of OKX.
Proof of Reserves (PoR) is an auditing process for crypto assets held by a custodian platform to ensure that they hold the exact amount of funds as claimed on the behalf of their users. OKX uses the Merkle Tree (hash tree) method to prove its claims in two ways. Users can find their balance in the tree and prove that those assets are held in the exchange’s balance sheet, or the total balance can be compared to the on-chain wallet balance that was published by the exchange in order to determine its PoR.
Following the collapse of FTX, the once world’s third largest crypto exchange by trading volume, investors have been wary about the status of their assets held on centralised custodian platforms. Last month, OKX became one of the first exchanges to publish an audit of its reserve assets. At the time, the company said that the move would set an industry standard for transparency, risk management and user protection.
Users can view and verify OKX’s reserves by visiting the PoR page on its website. Currently, the company provides an overview of its holdings and liabilities in the top three cryptocurrencies: Bitcoin (BTC), Ethereum (ETH) and dollar-pegged stablecoin Tether (USDT). These assets make up over 90% of its reserves. OKX has always maintained a reserve ratio of 1:1 to customer funds, and holds over 100% of every asset listed on its exchange. On-chain analytics firm Nansen, who conducts PoR audits for Indian crypto exchange CoinDCX, has a dashboard covering 39 other assets held by OKX, which includes Polygon (MATIC), Avalanche (AVAX), Tron (TRON), BNB Chain (BNB), Cardano (ADA), and Ripple (XRP).
To ensure complete transparency of its PoR initiative, the company has published details of more than 23,000 addresses that hold its reserve assets, and will continue to use these addresses to allow the public to audit fund flows to and from the platform.
For customers who want to self-audit company reserves, OKX has included two file documents on the website that will instruct them on how to conduct the audit by themselves using a PC. The first document titled “How to verify if your assets are included in the OKX Merkle tree?” explains how to query the OKX web app API to get a Merkle Tree of customer balances and compare the data to what is publicly available on the blockchain. The second document titled “How to verify OKX’s ownership and balance of the wallet address?”, explains how users can get a Merkle Leaf of their own balances and verify if it is part of a larger Merkle Tree.
OKX also has plans to launch the first non-custodial exchange-based wallet for its institutional and high net-worth clients. The wallet will allow the company’s premium customers to keep private keys to their tokens, view and track their crypto in real-time, and hold their assets separate from company reserves.
Trusted by more than 20 million customers worldwide, OKX holds over $6.5 billion worth of crypto assets in its reserves.