Crypto exchange OKX disclosed $7.5 billion in reserves of Bitcoin (BTC), Ether (ETH) and Tether (USDT) as part of its monthly proof-of-reserves (PoR) report. Based on data from blockchain analytics firm CryptoQuant, OKX claims to have the “largest clean asset reserves among major exchanges.”
OKX claims to maintain 1:1 reserves, which would mean means the company’s on-chain assets 100% match the customer‘s balances. The report shows current reserve ratios of 105% for BTC, 105% for ETH and 101% for USDT.
The term “clean” is used in proofs of reserves to describe crypto assets that do not include an exchange's platform tokens and are purely made up of high-market-capitalization crypto assets, such as BTC, ETH and USDT.
CryptoQuant monitors PoRs across the industry. A clean reserve is defined by the firm as:
“A clean reserve is the total reserve of each exchange, excluding exchange native token. There can be a risk in the exchange’s liquidity if a self-issued token holds a significant percentage of the total reserve amount. Hence, we have applied the clean reserve to visualize the liquidity of each exchange transparently.”
The analytics firm concluded OKX’s assets to be 100% clean. The PoR report, which is available on OKX’s website, includes historical reserve ratios data and liabilities. According to the company, it has published more than 23,000 addresses as part of its Merkle tree PoR program “and will continue to use these addresses to allow the public to view asset flows.”
Many in the industry are calling for more detailed disclosures of liquidity through the use of proof-of-reserves reports since FTX’s collapse in November 2022. Since then, many crypto exchanges have released third-party reports, including Binance, KuCoin, Crypto.com and Bitfinex.
Two accounting firms, Mazars and Armanino, dropped crypto services from its portfolios in December, leaving exchanges without audit coverage at a crucial time. Armanino was the audit company for FTX and has faced pressure from non-crypto clients after being unable to spot problems in the now-bankrupt company.