Kraken co-founder, Jesse Powell, has criticized the initiative of cryptocurrency exchange Binance to ensure transparency in the storage of user funds.
He has written on Twitter:
“I’m sorry but no. This is not PoR. This is either ignorance or intentional misrepresentation. The merkle tree is just hand wavey bullshit without an auditor to make sure you didn’t include accounts with negative balances. The statement of assets is pointless without liabilities.”
According to him, the whole point of Proof-of-Reserves is to determine if a platform has more digital assets than it owes to customers.
Binance CEO Changpeng Zhao has promised an audit by auditors in the future. He has also rejected the possibility of including accounts with negative balances and stated that he was open to questions and reviews.