Are exchanges evading proof of reserves unsafe for users? - page 2.

DoublerHunter

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Quote from: AmoreJaz on August 02, 2023, 05:17:39 PM

Quote from: Johnyz on August 02, 2023, 04:47:29 PM

This issue started since the exit of FTX and now we are talking about this again, Binance showed their financial capability and I think that can be a good relief to Binance users and other exchanges also did this. Well, the question is, is this enough to be called a safe exchange? Honestly anything can happen in an instant just look at FTX as an example, it is a top exchange before but look at what happened. If you don’t want to be on trouble and don’t want think about this from time to time, better not to hold big funds on any exchanges.

that is true, we can't get an absolute assurance from all these exchanges, whether they are at the top or not. but one thing you can safeguard your funds is get out your funds as soon as you finished trading. secure it in your own wallet where you have full control of your funds.
having proof of reserve of funds won't guarantee that they will rug pull or do something unexpected. they can easily give the wallet address having their funds but they have full control of such funds, so they can still do what they want to do with their vault money.

^Definitely right.
While measures like proof of reserves and financial capability are positive steps toward transparency, they do not provide an absolute guarantee against all risks. Even with such assurances, there is always a possibility that exchanges could engage in unexpected or unethical behavior.
One of the most secure ways to safeguard your funds is to withdraw them from the exchange as soon as you are done trading and store them in your own wallet. By using a hardware wallet or other secure cold storage solution, you have full control over your private keys and funds, reducing the risk of potential losses due to exchange-related issues.

milewilda

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Quote from: Vivageneviv on August 02, 2023, 04:07:42 PM

Proof of reserves is designed to get exchanges demonstrate transparency by proving that customers deposits are safe in their possession. In an industry riddled with uncertainties and fraud, the need to reassure investors that their funds are safe cannot be overemphasised.

In a bid to raise transparency and trust in cryptocurrency exchanges Proof of reserves allows customers and auditors to indeed verify that exchanges retain the funds they deposited in them.
Unfortunately only a handful of exchanges currently offer any kind of proof of reserves for their customers; while some cite security, cost and competitive disadvantages for their failure to release their proof of reserves, the bold ones have gone on to release theirs.

As a trader, do you feel safe using such exchanges that haven’t released theirs or should the more transparent ones be given preference?

To be able to know or able to see the better on which it does really give out that kind of transparency and we investors or users would really be having that kind of emotion of having that kind of confidence on which we do
always prefer on seeing on everything specially on reserves but its true that only a handful or platforms who do really give out that kind of transparency and the rest are just making out some reasoning that they cant just provide out such information and having the alibi about security or whatsoever but actually they might really just trying out to hide off something whether on those common means.
About unsafe things then as long you do put up your money on an exchange platform or something that you dont possess the keys of your wallet then its not considered 100% safe even if we do speak about the most
known or reputable exchange in the planet but still it wont really be giving out assurance of total safety of your coins because of possible circumstances that might happen then for sure you would be able
to experience those locked up for funds or really totally lost your asset which is totally that devastating.

Wiwo

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Quote from: Chibaba on August 02, 2023, 05:10:52 PM

Quote from: Wiwo on August 02, 2023, 04:20:02 PM

The big question is, how reserved is the poof of reserved?

Because just as we have fake trading volume or bot trading in exchange same way exchange can still manipulate the proof of reserves, and of what use will a proof of reserve be if the exchange declare bankruptcy just like what FTC did in 2022.

The bottom line is never to trust an exchange and does not allow your balance on the exchange to exceed the amount you want to trade with to avoid losing all your money trusting using an exchange as your personal wallet.

Always make sure to keep your funds off the exchange, even though the displayed proof of Reserved find (POR).

You have some valid point but the crypto market is all about taking risk and also trading with what you can afford to loose. FTX was an accident and a huge lesson to other top exchanges. I wouldn't discredit the idea of proof of reserve even though it can be manipulated but its an idea that have restored confidence in the market.

It's also worthy to note that exchanges like Binance, OKX and particularly Bitget have launched 'Customer Protection Fund' which is currently exceeding $2 billion in total. This is another asset security measure these three have in place and I also learnt Houbi and Coinbase have a similar arrangement but in the form insurance. So I guess in no distance time the crypto market will have more sanity than what we use to have. Its an emerging space and we are evolving

I think have a reserve funds and an insurance cover will give exchange legitimacy from it users since they will have the confidence that in the event that anything happens to the exchange they can reclaim their funds through the insurance company but saying that the exchange will maintain a reserve balance by itself still leave us with the same risk.

Binance has safu which is something relieving but the big question is, is the safe fund registered with an insurance company that can step in to settle customers when things go wrong?

AmoreJaz

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Quote from: Johnyz on August 02, 2023, 04:47:29 PM

This issue started since the exit of FTX and now we are talking about this again, Binance showed their financial capability and I think that can be a good relief to Binance users and other exchanges also did this. Well, the question is, is this enough to be called a safe exchange? Honestly anything can happen in an instant just look at FTX as an example, it is a top exchange before but look at what happened. If you don’t want to be on trouble and don’t want think about this from time to time, better not to hold big funds on any exchanges.

that is true, we can't get an absolute assurance from all these exchanges, whether they are at the top or not. but one thing you can safeguard your funds is get out your funds as soon as you finished trading. secure it in your own wallet where you have full control of your funds.
having proof of reserve of funds won't guarantee that they will rug pull or do something unexpected. they can easily give the wallet address having their funds but they have full control of such funds, so they can still do what they want to do with their vault money.

Chibaba

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Quote from: Wiwo on August 02, 2023, 04:20:02 PM

The big question is, how reserved is the poof of reserved?

Because just as we have fake trading volume or bot trading in exchange same way exchange can still manipulate the proof of reserves, and of what use will a proof of reserve be if the exchange declare bankruptcy just like what FTC did in 2022.

The bottom line is never to trust an exchange and does not allow your balance on the exchange to exceed the amount you want to trade with to avoid losing all your money trusting using an exchange as your personal wallet.

Always make sure to keep your funds off the exchange, even though the displayed proof of Reserved find (POR).

You have some valid point but the crypto market is all about taking risk and also trading with what you can afford to loose. FTX was an accident and a huge lesson to other top exchanges. I wouldn't discredit the idea of proof of reserve even though it can be manipulated but its an idea that have restored confidence in the market.

It's also worthy to note that exchanges like Binance, OKX and particularly Bitget have launched 'Customer Protection Fund' which is currently exceeding $2 billion in total. This is another asset security measure these three have in place and I also learnt Houbi and Coinbase have a similar arrangement but in the form insurance. So I guess in no distance time the crypto market will have more sanity than what we use to have. Its an emerging space and we are evolving

Johnyz

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This issue started since the exit of FTX and now we are talking about this again, Binance showed their financial capability and I think that can be a good relief to Binance users and other exchanges also did this. Well, the question is, is this enough to be called a safe exchange? Honestly anything can happen in an instant just look at FTX as an example, it is a top exchange before but look at what happened. If you don’t want to be on trouble and don’t want think about this from time to time, better not to hold big funds on any exchanges.

Wiwo

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The big question is, how reserved is the poof of reserved?

Because just as we have fake trading volume or bot trading in exchange same way exchange can still manipulate the proof of reserves, and of what use will a proof of reserve be if the exchange declare bankruptcy just like what FTC did in 2022.

The bottom line is never to trust an exchange and does not allow your balance on the exchange to exceed the amount you want to trade with to avoid losing all your money trusting using an exchange as your personal wallet.

Always make sure to keep your funds off the exchange, even though the displayed proof of Reserved find (POR).

Oshosondy

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The only exchange that I may be using that is not supporting it is Coinbase, but luckily my country is restricted to use the exchange. I do not like how the exchange do not support derivative trading too.

I noticed that all the exchanges that I am using like Binance, Bybit, OKX, Huobi global and Kucoin all have proof-of-reserve. There are many exchanges that are having it that crypto exchange users can choose from.

But people should not trust proof of reserve because it can be manipulated. We should also not be deceived and still always know that not your key not your coin. Proof of reserve can not prevent the inconveniences of many exchanges and also it can not prevent exchange hack.

Vivageneviv

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Proof of reserves is designed to get exchanges demonstrate transparency by proving that customers deposits are safe in their possession. In an industry riddled with uncertainties and fraud, the need to reassure investors that their funds are safe cannot be overemphasised.

In a bid to raise transparency and trust in cryptocurrency exchanges Proof of reserves allows customers and auditors to indeed verify that exchanges retain the funds they deposited in them.
Unfortunately only a handful of exchanges currently offer any kind of proof of reserves for their customers; while some cite security, cost and competitive disadvantages for their failure to release their proof of reserves, the bold ones have gone on to release theirs.

As a trader, do you feel safe using such exchanges that haven’t released theirs or should the more transparent ones be given preference?

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