tl;dr
CryptoQuant's new report ranks the transparency of five major crypto exchanges based on proof-of-reserves (PoR) practices. Binance leads with reserve ratios consistently above 100% and timely monthly reports. OKX follows closely, also maintaining over 100% coverage with regular disclosures. Bybit ra...
CryptoQuant’s latest report ranks Binance as the most transparent crypto exchange in proof-of-reserves (PoR) reporting, followed by OKX, Bybit, Kraken, with Coinbase trailing in last place. Binance and OKX demonstrate strong reserve ratios above 100% and maintain consistent, timely monthly disclosures, setting the industry benchmark for transparency. Bybit has improved its reporting frequency from bi-monthly to monthly, showing reserve ratios between 105% and 115%, while Kraken maintains coverage over 100% but updates its reports infrequently. In contrast, Coinbase has yet to publish any PoR report, highlighting a major transparency gap given its market significance.
Proof-of-reserves is a transparency practice that crypto exchanges adopted widely following catastrophic collapses like FTX and Mt. Gox. It involves proving that the exchange holds sufficient digital assets to fully back customer deposits. This transparency measure reassures customers about the safety of their funds by showing concrete backup in reserves. Despite its intentions, the method has drawn criticism from notable industry figures like Michael Saylor, who warns that public disclosure of wallet addresses within PoR reports can introduce serious security vulnerabilities, a concern amplified by potential AI-generated threat assessments.
The PoR rankings by CryptoQuant analyze reserve ratios, calculated as the net customer balance divided by the exchange’s total balance. Binance leads with consistent coverage above 100% and punctual monthly reports. OKX closely follows, also surpassing 100% coverage and providing regular, on-time disclosures. Bybit comes in third, showing steady improvement in transparency practices. Kraken holds fourth place with adequate reserve ratios but a lesser frequency of reporting. Coinbase’s absence of any PoR data places it firmly at the bottom, reflecting a shortfall in market transparency expectations.
Overall, Binance and OKX set the standard for PoR transparency in today’s crypto landscape, while Bybit and Kraken show encouraging progress. Coinbase’s failure to share proof-of-reserves information underscores a notable deficiency at a time when investor confidence increasingly hinges on visible assurances of solvency. Investors and market watchers should consider how these transparency practices reflect each exchange’s commitment to safeguarding user assets and managing operational risks amid ongoing industry scrutiny.