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CoinEx Launches Proof of Reserve to Ensure Asset Security and Build a Crypto Trust System

2022-12-16 07:13:19

Since 2022 kicked off, the crypto industry has witnessed a series of incidents involving security breaches. Three Arrows Capital was accused of misappropriating client funds and faced a liquidity crisis; FTX also suffered a run that led to a liquidity crunch because it misused users’ assets. To date, many individual and institutional investors still cannot get their money back from Three Arrows Capital and FTX. Crypto technology was showered with praise when it was invented, and people used to say that it was the trust machine that would enable full information transparency. However, after more than a decade since the birth of Bitcoin, today’s crypto industry is accused of frequent frauds and a lack of transparency.

In light of the recent crypto scandals, CoinEx has taken fast actions to work out a plan to help users understand CoinEx’s asset transparency more conveniently and launched Proof of Reserve to reassure all investors and promote the sustainable, healthy development of the crypto industry. Right now, CoinEx’s Proof of Reserve covers BTC, ETH, CET, USDT, USDC, and SHIB. In the future, more cryptos will be covered.

What is Proof of Reserve?

Proof of Reserve is a way to audit assets. It employs immutable technical measures to verify whether a platform has enough on-chain assets to back the book assets of its users.

CoinEx uses Merkel Tree to prove that the exchange maintains a 100% reserve rate. Specifically, this audit methodology requires three key steps for verification:

1. CoinEx uses Merkle Tree as a data structure to encrypt user assets and publish the total assets of all users at the same time. Every CoinEx user can check whether his or her account assets are included in the Merkle tree to verify the authenticity of the figures;

2. CoinEx displays the total assets of all on-chain wallet addresses and wallets held by the exchange, and users can verify CoinEx’s ownership of the addresses through the relevant tools;

3. By comparing the total assets of all users with the total assets of all on-chain addresses on CoinEx, users can verify the asset reserve rate of CoinEx.

When the total on-chain assets on CoinEx are greater than or equal to the total assets of the user, it proves that CoinEx maintains a 100% reserve rate. In that case, all account balances are backed by real assets and CoinEx didn’t misuse user assets.

Right now, users can check CoinEx’s Proof of Reserve by clicking on “Proof of Reserve” on the navigation bar at the bottom of the CoinEx website or “Proof of Reserve” on the homepage of the CoinEx App. In the meantime, users may also follow the step-by-step guides in the Help Center to verify whether CoinEx owns the addresses and whether their assets are included in the Merkle Tree.

View CoinEx Proof of Reserve:https://www.coinex.com/reserve-proof

How to verify ownership of CoinEx wallet address:

https://www.coinex.com/reserve-proof/help/verify-address

How to examine whether my assets are in the Merkle Tree:

https://www.coinex.com/reserve-proof/help/check-merkle

Keep user assets secure & build a crypto trust system

As a long-term believer in crypto technology, CoinEx intends to preserve the interest of its users with the best products and services, growing alongside the industry and investors. To that end, the exchange has always regarded asset security as its bottom line. Meanwhile, CoinEx has promised to maintain a 100% reserve rate and lived up to that promise. On the exchange, users’ assets are never misused for any reason whatsoever, and all withdrawal requests are promptly processed.

CoinEx launched the Proof of Reserve to to prevent manipulation, boost trust in crypto through transparency and mitigate security risks facing the industry. Going forward, CoinEx will not disappoint the users who have always trusted and supported the exchange. We will continue to maintain the 100% reserve rate and rigorously implement all security procedures and criteria. Aiming to make crypto trading easier, CoinEx will protect the interest and assets of more investors and build trust in crypto to enable the healthy development of the industry and provide users with a secure, reliable, and transparent investment environment.

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