Michael Saylor Criticizes Proof-of-Reserves

The current method of publishing Proof-of-Reserves poses hacking risks for cryptocurrency companies, according to Michael Saylor, founder of Strategy, during his speech at Bitcoin 2025.

“Verification of reserves via blockchain reduces the security of companies, custodians, and investors. It’s a bad idea,” emphasized the Bitcoin maximalist.

He stated that revealing wallet addresses allows malicious actors to track transactions and plan attacks.

Exchanges and ETF providers use Proof-of-Reserves to confirm the presence of funds equivalent to client deposits. Following the collapse of FTX in 2022, Binance, Crypto.com, OKX, and others adopted the practice. However, Saylor noted that such reports only show assets, not the companies’ liabilities.

“No corporate security expert would support publishing all addresses. Artificial intelligence would generate 50 pages of potential vulnerabilities,” he added, declining to comment on whether Strategy would disclose its reserves.

Saylor pointed out that the industry has learned lessons from the bankruptcies of FTX and Mt.Gox, but called Proof-of-Reserves an ineffective tool.

“Transparency should not compromise security,” the businessman concluded.

In September 2024, Binance released another Proof-of-Reserves audit, confirming the over-collateralization of client funds.