Three years after the FTX collapse... striving to restore trust through "proof of reserves".

Today, three years after the collapse of FTX in the Crypto Assets industry, we once again arrive at a turning point that requires us to reassess the essence of “trust.” The foundation of industry stability and sustainable development ultimately lies in “verifiable transparency” — a lesson that is particularly precious in the current high Fluctuation market environment.

At this time, it is worth paying attention to the concept of “Proof of Reserves”. PoR is based on a simple yet powerful principle: transparently demonstrating that the reserves held by the exchange are matched 1:1 with customer assets through on-chain audits and other means. Since the FTX incident, PoR has garnered significant attention as a substantive measure for the industry to shed its “wild west” image.

Although the current Crypto Assets market shows a relatively optimistic trend, it is indeed a good opportunity to shape PoR as the industry's “standard.” Data from independent agencies indicate that some mainstream exchanges still insist on releasing monthly PoR reports. In contrast, most exchanges have inconsistent reporting cycles or directly lack relevant information. As proven by previous bull markets, when market enthusiasm is high, it is precisely a time when the industry's “self-discipline” is put to the test.

Last October, a massive flash crash event occurred that caused approximately $20 billion in leveraged positions to evaporate instantly. This not only exposed the structural risks of the Crypto Assets market but also highlighted the resilience of transparent systems. The comprehensive reduction of open contracts in decentralized exchange derivatives became a typical example of how excessive leverage can trigger a chain liquidation.

Against the backdrop of stricter regulations soon to be implemented, PoR is a scarce way for trading platforms and project parties to build autonomous trust. The crypto assets industry should remember: compared to the silence that breeds doubt, continuous and transparent data disclosure is the cornerstone of building long-term trust.