The cryptocurrency exchange KuCoin has engaged Mazars, an international auditing firm, to prepare a reserves report under the Proof-of-Reserves procedure.
As the People’s Exchange, we place the safety and security of users’ funds as our top priority.
And so, we are proud to announce that #KuCoin has partnered with Mazars, a leading international audit, tax and advisory firm to increase transparency!
— KUCOIN (@kucoincom) December 5, 2022
According to the statement, the firm will provide detailed information on the backing of user assets, funds, and liabilities. The data will cover spot, trading, margin, contract and other accounts for Bitcoin, Ethereum, USDT and USDC.
«This step is part of our efforts to ensure transparency of user funds, underscoring our commitment to strengthening trust in the industry», — commented KuCoin CEO Johnny Lyu.
The exchange plans to publish the results of the verification on its site within a few weeks.
«In the wake of recent industry events there is a strong need for additional transparency. We are confident that Mazars’ Proof-of-Reserves service, offered to KuCoin and other crypto exchanges, will help strengthen trust», — said Vechan Oliver, partner and head of the auditor’s digital assets division.
At the end of November announced Binance‘s own Proof-of-Reserves feature. It allows Bitcoin holders to verify that their funds on the platform are backed by corresponding asset volumes. The solution is expected to be extended to other cryptocurrencies in the future.
The founder of Kraken, Jesse Powell criticised the Binance initiative. In his view, the tool does not prove that the exchange holds more Bitcoin than its obligations to customers.
The platform team used Merkle tree to merge wallet data. According to Ethereum founder Vitalik Buterin, the best result would be achieved by applying zk-SNARKs technology.
In early November, amid the collapse of FTX, the exchange revealed information about its own cryptocurrency reserves. Following Binance’s example, a number of other platforms, including Huobi, Bitfinex and Bybit.
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