November marks two years since the FTX exchange went bankrupt. Since then, major crypto exchanges have seen their Bitcoin reserves grow.
FTX’s inability to maintain sufficient reserves to meet user requests exposed severe flaws in its controls. It also highlighted the need for greater transparency and reliable reserve reporting among all crypto exchanges.
Observers have grown keenly aware of the risks that exchanges face when they lack sufficient reserves. If they cannot meet withdrawal requests, it undermines user confidence and puts them at risk of losing funds. Maintaining adequate reserves is critical for liquidity and order execution, especially during volatile periods.2022How has crypto changed post-FTX?
FTX‘s collapse in November 2022 was one of the most significant and dramatic events in the crypto industry’s history. This incident undermined investor confidence and caused profound changes in the crypto market’s structure and functioning.
At the time, the price of Bitcoin Bitcoin
5.74%
Bitcoin and other major cryptocurrencies fell, reflecting fear and distrust of institutional players in the market. Many investors began to doubt the safety and stability of crypto and, as a result, decided to leave the market completely.
Attention toward security issues became even more urgent. Many crypto exchanges and projects have begun implementing new measures to protect users’ funds, including two-factor authentication, monitoring systems, and analyzing transactions for suspicious activity.
New security standards have emerged, as well as solutions to prevent the loss of funds in case of hacks or fraudulent activities. Among others, the PoR standard has emerged — a mechanism cryptocurrency exchanges use to publicly demonstrate that they have enough assets in reserve to cover all user balances.
“PoR fosters trust and transparency, as it allows users to confirm that an exchange has not over-leveraged or mismanaged their assets, which has become particularly crucial following high-profile exchange collapses in the industry.”Major exchanges record Bitcoin outflow
Among the major exchanges with the most prominent Bitcoin reserves, only Coinbase does not publish PoR reports. Experts note that the other major exchanges periodically provide such reports with varying degrees of transparency.
Binance’s reserve increased by 28,000 BTC, or 5%, reaching 611,000, despite the pressure from the U.S. authorities in 2023. Among the major exchanges, Binance also shows the most minor reserve decrease over the entire period, not exceeding 16
%.
