Proof Of Reserves

This is an example of false security. Sure it shows thast at a certain point in time that there was held enough coins to pay each depositor, but it does not say that the exchange can't just move your money at a later date. The only viable custody for exchanges is to store the users funds in on chain addresses where the user has the private key. This means even if the exchange goes bust you can move your funds yourself on chain. The only risk is that likely the exchange will also know your private key, so they could move your funds. The best solution is for the user to generate thier own private key and the exchange and the user must both sign to move funds, aka a multisig wallet.

open source centralized exchanged merkle tree proof of reserves [1] [2]

not very good [3]

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It's Sat, 10 Dec 2022 02:03 UTC in Vaultlandia