Crypto Exchange ‘Proof of Reserves’ Not Calming Investor Fears and OKX saw massive investor outflows despite showing their reserves


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Crypto exchanges are trying to prevent a liquidity crisis by proving there is no liquidity crisis. It doesn’t seem to be working.

After FTX went under, crypto exchanges and OKX created so-called “proof of reserves” dashboards showing evidence of their token reserves. By Monday, a combined $850 million disappeared from the dashboards as investors removed funds from the exchanges. 

Blockchain data platform Nansen has become the in-demand platform for proof of reserves, with Binance, and OKX all creating dashboards in the last few days.

Read more: What Is Proof of Reserves and Can It Build Back Trust?

Struggling to restore customer confidence’s proof of reserves went live Friday, showing 20% of its reserves — representing customer assets — were held in the Shiba Inu (SHIB) meme token.

“We have no control over what you guys buy. You buy it, we will store it,” CEO Kris Marszalek said in a Monday livestream, adding: “Those are not our funds. Those are our client funds.”

The centralized exchange also faced questions Saturday over roughly $400 million worth of ether it claims to have accidentally sent to fellow exchange in October. Marszalek characterized the transfer as an innocent mistake.

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All ether was subsequently returned, and claimed the funds were not counted in that exchange’s own proof-of-reserves snapshot.

Nevertheless, it wasn’t the first time a mistake like this happened, and the Nansen dashboard shows more than $500 million flowed out of’s reserves over the weekend.

More transparency needed matching reserves and liabilities

The Seychelles-based OKX exchange — which faces an asset movement controversy similar to’s — launched its own Nansen dashboard Saturday, showing $6 billion in reserves. That figure had dropped below $5.8 billion on Monday.

Wary of being caught in the next FTX, investors seem to be snatching up liquidity where they can get it. Aaron Kaplan, CEO of digital asset platform Prometheum, thinks showing assets without context doesn’t really prove exchanges have healthy balance sheets.

“There’s no liquidity crisis if we have customer funds and assets. But what about the potential leverage?,” Kaplan said. 

It’s one thing for exchanges to claim they have enough assets on their balance sheet, as FTX did in its last days. It’s another thing, in a post-FTX world, to get investors to believe them. 

Both OKX and have pledged to undergo audits, which Thomas Perfumo, the head of strategy at Kraken, cited as one way reserves can be proved legit.

“I could tell you my liabilities are 5 or 20, but if I tell you that, you’re basically trusting me to make a true statement,” Perfumo told Blockworks, noting that an auditor can verify what a platform’s liabilities really are.

Kraken is audited semiannually by Armanino, a popular auditor that also does business with exchanges including Ledn, Nexo and There seems to be a general desire among good-faith actors in crypto to prove their reserves. But trust won’t be won back easily.

“You’re just not going to get [trust] in a day. That’s the reality,” Perfumo said.

OKX and did not immediately return requests for comment.

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