The Proof of Reserves Report shows that reserves for cryptocurrencies are largely dispersed between Bitcoin, Ether and USDT.
Crypto exchange pointed to these cryptos
According to a proof of reserve released by the exchange on Thursday, OKX has $7.5 billion in reserves, which does not include its native token. This is the third proof of reserve OKX has released, but the first to show a full breakdown of assets. The report shows that the exchange is over-collateralized with a reserve ratio of 105% for Bitcoin (BTC), 105% for Ether (ETH) and 101% for USDT.
OKX’s release of its full asset mix comes in response to a CryptoQuant that has developed a metric to measure the ‘cleanliness’ of reserves. CryptoQuant defines it as how dependent an exchange is on its native token. As we stated as Kriptokoin.com, CryptoQuant’s data shows that OKX’s reserves are 100% clean. Meanwhile, Binance shows 87% clean, Bitfinex 70% and Huobi 60% clean.
Haider Rafique, OKX’s Chief Marketing Officer, said in an interview, “I personally think everyone will learn a lot in the next six months to a year. We’ll all, hopefully constructively, stress-test each other’s evidence of reserve.’ said. Then ‘We’re all going to learn from each other and ask the hard questions. I hope most places have good intentions.’ he added.
Rafique says OKX plans to release its proof-of-reserve report every month. The exchange also plans to launch a bug bounty program that will allow developers to ‘nudge’ the report to see if there are any bugs in the system or something else OKX needs to address.
A different type of native token
The so-called cleanup of the reserves is important because of the relationship between the now bankrupt FTX and its sister company, Alameda Research. As CoinDesk reported in November, a significant portion of Alameda’s balance sheet consisted of FTT, a synthetic creation of FTX. From this, numerous questions arose as to what underpins Alameda’s ability to trade and invest.
Also, in late December, the U.S. Securities and Exchange Commission said in a complaint against former Alameda executive Caroline Ellison that FTT and other exchange tokens are investment contracts and thus a security. Ellison is not contesting the SEC’s allegations as part of the general criminal complaint and is collaborating with prosecutors.
In this complaint, the SEC emphasized that FTX plans to use funds from FTT sales to create, promote and manage the FTX business with the aim of making FTT an ‘investment’ with potential for profit.
“We have never used a native token to fund the company,” Rafique said in an interview. “The native token has never been a big part of our business or treasury. Our native token has always been designed to engage our most active customers and give them a way to search for discounts through activity on the platform.’ made statements.
The distinction between cryptocurrency and exchange
As other exchanges are launching their own stablecoins, their own problems have arisen. Rafique says this is not on the agenda for OKX
“We don’t believe any centralized or decentralized trading place has any business that initiates its own tradable assets, or even a stable presence in which people settle,” Rafique said. “There are many conflicts of interest that exist. It goes back to our philosophy on native tokens. We are not building our company around a local token offering.’ he added.
OKX runs a venture fund called OKX Ventures, but as Rafique explains, this firm has a separate balance sheet and a team of executives managing it. OKX Ventures uses fiat currency when it invests. ‘It’s a very traditional backdrop with a very traditional format,’ Rafique said.
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