A new report from CryptoQuant ranks the transparency of the five major cryptocurrency exchanges based on their proof-of-reserve (PoR) activity. The analysis shows that Binance is leading, while other exchanges such as Bybit, OKX, Kraken, and Coinbase are lagging.

PoR Ranking

The survey assesses the reserve ratio of each exchange, a metric calculated by dividing the net balance of customers by the total balance of the platform. Binance ranks first in transparency, consistently maintaining coverage above 100% and publishing PoR reports monthly and on time.

OKX is closely behind, also reporting a capital support ratio still above 100%. However, this figure is slightly lower than Binance. This exchange also publishes information monthly and without delay.

Bybit follows next on the list, with a reserve ratio ranging from 105% to 115%. The platform has recently improved its disclosure activities by moving from bi-monthly reports to monthly reports.

CryptoQuant ranks Kraken fourth, with the exchange maintaining support figures above 100%. However, this exchange has only published four reports since November 22, 2022, with CQ's analysis emphasizing the need for more frequent updates.

Coinbase is ranked last because this exchange has not published any PoR reports. Analyst Maartun describes this trend as a significant shortcoming, especially considering the company's scale and market position.

Coinbase Does Not Disclose Reserves

CryptoQuant's quick newsletter notes that Binance and OKX are currently setting the standard for the industry due to their strong reserve ratios and consistent, timely reporting.

Although there are still some gaps to be filled, Bybit and Kraken are also making progress. However, Coinbase stands out as the only exchange among the five evaluated that has not yet provided any PoR data.

Proof-of-reserve is a method used by cryptocurrency exchanges to demonstrate that they hold enough digital assets to cover customer deposits. This transparency measure became popular among organizations after major cryptocurrency platforms like FTX and Mt. Gox collapsed, leaving investors uncertain about the safety of their funds.

Although increasingly adopted, this activity has also been criticized by some notable figures in the cryptocurrency industry. Michael Saylor of Strategy recently called it a "bad idea." He argued that disclosing wallet addresses, often part of the PoR process, would pose serious security risks.

According to a Bitcoin enthusiast, no professional security group publicly recommends wallet structure. He also claimed that if AI were asked to assess the risks posed by this activity, it would produce 50 pages on potential threats. $USDC