Bank of America (BAC), one of the largest banks in the USA, stated that the proof of reserve of cryptocurrency exchanges will not be enough.
The collapse of the popular cryptocurrency exchange FTX shook the entire industry. The evaporation of a billion-dollar asset has begun to turn investors away from cryptos. Exchanges that want to instill confidence in crypto investors and revive the industry again took action. Binance CEO Changpeng Zhao (CZ) stated that the exchange will now share its assets transparently. Other cryptocurrency exchanges were also involved in this move. However, Bank of America thinks these are all hasty decisions.
Bank of America Links Its Asset Shares to Building Confidence
Global banking and finance company Bank of America (BAC) has considered the asset splits of cryptocurrency exchanges a hasty confidence-building move.
The bank noted that there was too much lack of evidence of reserve shared by exchanges. BAC stated that proof of existence has already been done through Merkle Trees. Making a statement about Merkle Trees, the bank stated that this is a more useful method.
Manipulation reasons were included in the bank’s consideration of the lack of evidence of existence. Problems such as showing assets at a fixed time, transferring just before taking a snapshot were highlighted.
Finally, BAC argued that regulations should come quickly.
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