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OKX Wants Transparency That Is ‘Better Than an Audit’

OKX Managing Director Lennix Lai told BeinCrypto that the number two crypto exchange is setting a new transparency standard. He calls OKX transparency a “ongoing endeavour.” Following FTX, we prioritized it. We now let all users check our reserves. We need to employ blockchain, our own technology, to achieve industrial transparency. If blockchain can do that, we should let our consumers benefit.”

Cryptorank.io ranks OKX as the second-largest spot market cryptocurrency exchange by adjusted volume. Cryptocurrencies are exchanged for immediate delivery on the spot market at market pricing.

OKX stated Thursday that it would improve its Proof of Reserves (PoR) mechanism in the coming months. Upgrades increase openness while protecting client privacy. After FTX collapsed, the exchange publishes monthly Proof of Reserves reports. The exchange’s latest reported USD 8.6 billion in BTC, ETH, and USDT.

Full responsibility tree disclosure will be the first enhancement in the March PoR report, according to their release. The whole responsibility Merkle tree may now be downloaded, increasing transparency. It will also separate and shuffle each user’s money into various portions for account balance anonymity.

Zero-knowledge proofs will be the second and most intriguing improvement, effective in the coming months (ZKP). This cryptographic approach verifies user money and assures solvency by comparing user asset net equity to exchange reserves.

This verifies that all user deposits are accounted for. It also assures the exchange can pay everyone who withdraws monies. “We want to expose the overall responsibility without exposing their user balance,” Lai tells BeInCrypto.

The blockchain will show whether your Bitcoin was placed into an OKX-branded public address. “We simply enable a user to verify all the time, any moment, whether your Bitcoin exists in your addresses,” adds Lai. If OKX or the exchange transferred your Bitcoin to do anything else, that’s bad. We demand openness beyond an audit.”

“Exceed market expectations for transparency,” stated Chief Marketing Officer Haider Rafique.

Transparency has benefited the sector. These precautions may have prevented the FTX catastrophe, which lost the crypto sector billions. CoinDesk revealed FTX’s leverage and solvency issues. Why wasn’t openness emphasized before? Lai said the sector focused on business issues. “Everyone concentrated on growth, marketing, and proof of concept with various tokens.”

Lai reported two positive industry developments after the FTX catastrophe. “The reality is the user, the customer, requested greater clarity and openness. Otherwise, they won’t trade with us,” said regulators under pressure.

Lai says industry trust is improving. OKX performs a basic exchange service. No other business. Users are beginning to grasp its value.”

Post-FTX, Lai says BeInCrypto, the business is talking to authorities more. He adds, “They have a lot more questions.” Our compliance staff has expanded.

Each product team must have a compliance component that incorporates regulatory requirements into well-designed products. Lai tells BeInCrypto that they want to create solutions that meet all regulatory criteria at once.

Through this effort, “In 12 months, we plan to apply for numerous licenses simultaneously.”

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