Kraken CEO On Binance’s Proof of Reserves: “Ignorance or Intentional Misrepresentation”
Crypto CEOs have been very active in showing Proof of Reserves, with J.Powell the latest taking jabs at the transparency of others.
Kraken CEO Calls Out Binance
In a series of blistering tweets on November 25, CEO and Co-Founder of Kraken, Jesse Powell, has called out the validity and accuracy of Binance’s recent reveal of its Proof of Reserves.
Binance released its Proof of Reserves a day prior in an effort of transparency. But in short order, Powell didn’t hold back in his sharp critique of the “hand wavey bullshit” he sees from the world’s largest exchange, Binance.
I'm sorry but no. This is not PoR. This is either ignorance or intentional misrepresentation.
— Jesse Powell (@jespow) November 25, 2022
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. https://t.co/b5KSr2XKLB
Powell continued to explain that Proof of Reserves should be coming out from exchanges to see “whether an exchange has more crypto in its custody than it owes to clients.” Binance’s lack of liabilities––or accounts with a negative balance, as Powell notes too––does nothing but mislead consumers and the crypto community.
The Kraken Co-Founder didn’t stop at Binance, calling out journalists who promote something they don’t understand. It should be noted that your author opined that Binance should show proof of liabilities in a Nov. 22 article on Binance’s public presentation of Bitcoin reserves.
People who oughta know better, journalists, especially, should take the time to understand this before overselling it and misleading consumers.https://t.co/Qzb5UY3Bdj
— Jesse Powell (@jespow) November 25, 2022
As noted in the tweet above, Powell defined true proof-of-reserves in a crypto exchange. He called for more vigorous audits that check all liabilities with cryptographic proof of the evidence.
2/2 #ProofOfReserves audit must have:
— Jesse Powell (@jespow) November 22, 2022
1. sum of client liabilities (auditor must exclude negative balances)
2. user-verifiable cryptographic proof that each account was included in the sum
3. signatures proving that the custodian has control of the walletshttps://t.co/QEZo0DzJfw
The CEOs of major centralized crypto exchanges have been embattled publicly for weeks since the fall of FTX. Binance CEO Changpeng Zhao (CZ) recently called out Coinbase’s reserves which promoted CEO Brian Armstrong to issue a strong response. Dueling AMAs also occurred from CZ and Crypto.com’s CEO, Kris Marszalek.
The recent bank run on FTX was notably started by a tweet thread from Binance’s CZ as well.
What is Binance:
Binance positions itself as the world’s leading blockchain ecosystem and crypto-asset infrastructure provider with a financial product suite that includes the largest digital asset exchange by volume. The Binance platform aims to increase the freedom of money for users and features a comprehensive portfolio of crypto-asset products and offerings, including trading and finance, education, data and research, social good, investment and incubation, decentralization, and infrastructure solutions.
Where to find Binance:
Website | Twitter | Discord | Telegram |
What is Kraken:
Kraken is a United States–based cryptocurrency exchange and bank founded in 2011. It is a digital exchange looking to be the go-to exchange that caters to traders of any level of crypto knowledge. Kraken is one of the oldest Bitcoin exchanges and supports more than 120 different coins to buy, sell, and trade with competitive exchange fees.
Where to find Kraken:
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Related News
Prisma Finance Reportedly Hit by $9M Hack: What to Know
Prisma Finance paused its protocol operations for investigation and advised vault owners to disable delegate approval.
Reports have emerged indicating that DeFi platform Prisma Finance, fell victim to a hacking attack amounting to approximately $9 million. Cyvers, a web3 security platform, raised the alert after it detected suspicious transactions linked to the breach.
🚨UPDATE🚨Our system has detected multiple suspicious transactions with @PrismaFi and still ongoing!
— 🚨 Cyvers Alerts 🚨 (@CyversAlerts) March 28, 2024
Total loss so far is around $9M. Attacker has funded by @FixedFloat!
Our system has detected the malicious contract 2 min earlier than hack transactions!👇
Our system would… https://t.co/9myoV8DL22 pic.twitter.com/SxT5yYZy7U
Initial estimates suggest a loss of $9 million, with the attacker reportedly utilizing funds from the crypto exchange FixedFloat.
Backing up Cyvers' findings, blockchain security firm PeckShield has confirmed the attack, providing details on the assets targeted by the hacker. Among the stolen assets are Prisma mkUSD and wrapped stETH.
In response to the breach, Prisma Finance issued a statement on X acknowledging the potential exploit. The project reportedly halted its protocol operations to conduct a thorough investigation into the incident.
Additionally, Prisma Finance advised vault owners to disable delegate approval as a precautionary measure.
We are aware of a possible exploit on Prisma.
— Prisma Finance (@PrismaFi) March 28, 2024
Core engineering contributors will pause the protocol and investigate.
We'll share an update and a post-mortem.
From DeFi Future to Security Concerns
Prisma Finance was initially hailed as the future of decentralized finance (DeFi), offering solutions in the form of a new LSTFi protocol. It enabled users to mint a fully collateralized non-custodial and decentralized stablecoin, mkUSD, using Ethereum liquid staking tokens (LSTs) as collateral.
However, the recent exploit paints a stark contrast to the platform's previous reputation, raising concerns regarding cybersecurity in the DeFi space.
Rising Trends in Crypto Hacks
The hack on Prisma Finance adds to a concerning trend in the cryptocurrency space. According to a Feb. 29 report by blockchain security firm Immunefi, over $200 million worth of cryptocurrency was lost to hacks and rug pulls last February, across 32 individual incidents.
This represents a 15.4% increase compared to the same period in 2023. Ethereum remains the most targeted blockchain, with 12 attacks accounting for over 85% of the total value lost in February.
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This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $2500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
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