Exchange Bit.com provided proof of solvency amid the chaos created by FTX’s downfall.
The fall of the FTX exchange has created ripples in the cryptocurrency industry. The downfall of the cryptocurrency giant was something no one saw coming.
It also paved the way for cryptocurrency exchanges to provide full transparency on their reserves. Several exchanges then took place to provide the details of the proof of reserves audit. This can build trust and provide full transparency on the funds held by the exchanges.
However, Bit.com takes a step forward with a different approach. The exchange tries to combine proof of reserves and proof of liabilities. Proof of solvency, as they call it, is the culmination of both. Let’s take a closer look at Bit.com,
Bit.com is a full-service cryptocurrency exchange powered by Matrixport, a Singapore-based integrated financial services company. It is a comprehensive cryptocurrency exchange offering options, perps, spot trading and savings, built on the state-of-the-art philosophy of simplicity.
To ensure a superior trading experience while leveraging high liquidity, the company has been built with the best Security and risk management functions. Bit.com was established in 2020 and is registered in Mahé, Seychelles.
“We believe privacy, security, and transparency are the cornerstones of building an exchange with a strong foundation for our users.” “Our goal is to have the necessary protocols and systems in place and to have a suite of tools designed to generate and validate PoR and PoL.”
Lan Yue, COO of Bit.com
In order to have full transparency, along with other CEXs, Bit.com also promised to release Merkle Tree’s proof of reserves. In addition to this, Bit.com will also release proof of liability.
Various parties have been consulted by Bit.com regarding the audit. The proof of reserves provided by Bit.com is much more transparent through its use of the Cactus, Cobo and Copper custodians.
Proof of liabilities is much more difficult to establish than proof of assets. Similar to asset verification, an exchange may publish a list of all liabilities, which includes account balances and the names of creditors.
By measuring leverage by adding proof of reserves and proof of liabilities (proof of reserves + proof of liabilities = proof of solvency), the exchange aims to maintain market confidence.
On top of all this, Bit.com is also stepping up its efforts to improve its privacy and security. The exchange is also working on properly recording responsibilities and adding proof of responsibility to the user system. A set of PoR and PoL validation tools as well as snapshot tools for reserves and liabilities are also on the exchange’s list of creations.
How secure are user funds on Bit.com?
At Bit.com, Security takes precedence over all things. In order to ensure maximum security, the exchange employs a three-pronged strategy that combines system risk management, high-level user protections, and top-notch custody.
They have also partnered with renowned institutional grade custodial service, Cactus Custody, to oversee and control the entire platform.
More importantly, it can recognize and reject unauthorized withdrawal signature requests thanks to Cactus’ protection mechanisms. Private key protection is another feature of the service popular with institutional and retail investors.
In an extremely difficult market situation, Bit.com has developed its vision to instill privacy, security and transparency among its users. With the promise of providing a comprehensive set of tools and full transparency on PoR and PoL, Bit.com could be your next go-to exchange.
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