BitMEX founder and ex-CEO, Arthur Hayes, took to Twitter on Thursday to announce that the funds on the exchange were completely safe. And, this was due to the release of their full-fledged roof-of-liability system. Using this, users could verify their individual liability on the crypto exchange’s total liability balance.
BitMEX Reveals Proof Of Liabilities
As per BitMEX’s official announcement, the self-verification process can be conducted on your own and does not require a third-party auditor. Talking about client privacy, BitMEX pointed out that user privacy is their utmost concern.
[1/4] BitMEX’s PoL System Now Live & Operational
All BitMEX depositors can now verify their individual liability is included in the total exchange liability balance. This self verification process can be conducted without a third party auditor.https://t.co/1z5MJ2nlVK
— BitMEX Research (@BitMEXResearch) December 1, 2022
And in order to preserve user privacy, account balances are randomly split into multiple leaves of the Merkle tree and not stored under one single roof. Reserve and Liability snapshots will be published twice a week on Tuesdays and Thursdays.
The official announcement further stated that,
“This PoL system is not a quick panicked reaction to the failure of FTX. The system is genuinely innovative and groundbreaking. It is the first system where every user can verify for themselves that their balance is included in the total, without breaching customer privacy.”
Push For Transparency
In accordance with FTX’s bankruptcy proceedings, it was uncovered that the crypto exchange had loaned out a large portion of its customer’s assets, keeping it hidden from the public knowledge.
As a direct result of this, well-known crypto exchanges have been frantically trying to reassure users about their proof-of-reserves in order to promote transparency in the market.
Read More: Crypto Exchanges Rush To Provide Proof-of-Reserves Following FTX Crisis
Concerns Raised On PoR Systems
However, this strategy has met with its share of criticism, as Kraken’s CEO, Jesse Powell points out that, exchanges publishing their reserve balances are “pointless”.
The Kraken CEO stated that the whole point of coming out transparent was to understand whether a crypto exchange had more crypto in its custody than what it owed to its clients.
Read More: Kraken CEO Calls Binance ‘Proof Of Reserves’ Pointless
The post Arthur Hayes Calls BitMEX Funds “SAFU” Due To This New Feature appeared first on CoinGape.
- Mobile app
- Telegram Channel
- Telegram Group
- Binance Referral Link
- Bitmex Referral Link
- (Recommended For Leverage) ByBit Referral Link
- Buy Ledger Nano at discounted price
- Buy Cool Wallets at discounted price
Don't forget to share your review/suggestions for the android app.
All In One Crypto App is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by All In One Crypto App or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risks