On November 13, the renowned crypto exchange platform Kraken revealed that it has been in touch with authorities over the FTX group’s bank accounts. To safeguard FTX and Alameda’s creditors, it froze all accounts associated with both companies.
Kraken has stated that it is unaffected and that the exchange has full reserves. According to CoinGecko, the exchange’s 24-hour volume places it at the nineteenth spot among all others.
Kraken’s reserves and audits were topics of inquiry for several Twitter users. As a response, the exchange provided a link to a page explaining how to view proof-of-reserves in a Kraken wallet. While Kraken’s audits reveal that all user accounts have been checked, the exchange’s total reserves remain hidden from customers.
Emerging PoR after FTX Demise
In light of recent happenings, proof-of-reserves (PoR) has emerged as a major talking point. The race is on for exchanges to show their users that they have the financial resources to support the assets traded there. Chainlink, an Oracle services provider, promoted its own proof-of-reserves infrastructure. Before this, Chainlink Proof of Reserves was released in 2020 so that DeFi platforms may offer unchangeable proof of the resources underlying their assets.
During the 2008 financial crisis, banks lent money they didn’t have to high-risk borrowers, which resulted in the emergence of crypto. The demise of FTX, which offered highly leveraged trading in high-risk assets to primarily unskilled individual traders, sounds uncomfortably similar.
However, after 2008, the market surged. Highlighting this issue was Changpeng Zhao, the CEO of Binance, stated that he believes the cryptocurrency market will be able to rebuild itself once the full consequences of FTX’s implosion are felt.
Zhao is a crypto enthusiast with an opinion that the cryptocurrency market will be able to rebuild itself. Other than CZ, Charles Hoskinson also anticipates the FTX crisis to be the market’s final tragedy.