Are exchanges evading proof of reserves unsafe for users?

[famososMuertos]

Proof of reserves ...//:::,,,

As a trader, do you feel safe using such exchanges that haven’t released theirs or should the more transparent ones be given preference?

That gives you confidence, if, well, you end up "taken by the balls", read the list of Exchanges that have pending payments due to different circumstances.

Please! you may understand, trading itself is defined as a high risk activity for the assets available, but the The issue is that you are at risk from the moment you deposit them, even if you do not make a single transaction, that is; You accept it and live with it, but doing it correctly, for example not depositing money that you are not willing to lose, e.g./etc.

Please! you may understand, trading itself is defined as a high risk activity for the assets available, but the The issue is that you are at risk from the moment you deposit them, even if you do not make a single transaction, that is what you have to understand and live with it.

[suzanne5223]

As a trader, do you feel safe using such exchanges that haven’t released theirs or should the more transparent ones be given preference?

As a trader, you shouldn't be naive that most of these CEXs are using almost the same strategy used by institutional banks to get their customer trust. The proof of reserves is just another strategy used by CEX so that their user can have more trust in the exchange in other to use it as storage which is not something every crypto enthusiast must do.
As a trader proof of reserves or not you shouldn't totally trust or feel safe with any CEX.

[Abu-Naim]

This issue started since the exit of FTX and now we are talking about this again, Binance showed their financial capability and I think that can be a good relief to Binance users and other exchanges also did this. Well, the question is, is this enough to be called a safe exchange? Honestly anything can happen in an instant just look at FTX as an example, it is a top exchange before but look at what happened. If you don’t want to be on trouble and don’t want think about this from time to time, better not to hold big funds on any exchanges.

Since FTX's demise, I've heard some unfavorable things about cryptocurrencies, which prompted me to do some research on them generally because people were portraying them as scams as a result of the market crash. After doing some research, I learned that there are centralized coins and some (few) decentralized coins, but I think Bitcoin is special because it was the first to make people aware of what cryptocurrencies were all about.

Since nobody is excellent and everyone makes mistakes at first, I have stopped trusting exchanges because I believe that any centralized project or exchange could betray its users and lead to the project's demise.

[JeffBrad12]

definitely, we aren't lacking the number of such platform out there, therefore you should just stick with the ones thats transparent I think CMC already gives badge towards these services that tries to disclose their proof of reserve, somewhat, i might be mistaken though but regardless it just goes to show their commitment that they are becoming transparent because they are committed to be a really good platform for anyone that wants to journey into the career of investing and trading cryptocurrencies.
if you are really concerned about your wealth and assets overall, judging by their transparency is first priority i guess to get a glimpse of how trusted these services truly are.

[Chibaba]

The big question is,  how reserved is the poof of reserved?

Because just as we have fake trading volume or bot trading in exchange same way exchange can still manipulate the proof of reserves,  and of what use will a proof of reserve be if the exchange declare bankruptcy just like what FTC did in 2022.

The bottom line is never to trust an exchange and does not allow your balance on the exchange to exceed the amount you want to trade with to avoid losing all your money trusting using an exchange as your personal wallet.

Always make sure to keep your funds off the exchange,  even though the displayed proof of Reserved find (POR).

You have some valid point but the crypto market is all about taking risk and also trading with what you can afford to loose. FTX was an accident and a huge lesson to other top exchanges. I wouldn't discredit the idea of proof of reserve even though it can be manipulated but its an idea that have restored confidence in the market.

It's also worthy to note that exchanges like Binance, OKX and particularly Bitget have launched 'Customer Protection Fund' which is currently exceeding $2 billion in total. This is another asset security measure these three have in place and I also learnt Houbi and Coinbase have a similar arrangement but in the form insurance. So I guess in no distance time the crypto market will have more sanity than what we use to have. Its an emerging space and we are evolving

I think have a reserve funds and an insurance cover will give exchange legitimacy from it users since they will have the confidence that in the event that anything happens to the exchange they can reclaim their funds through the insurance company but saying that the exchange will maintain a reserve balance by itself still leave us with the same risk.

Binance has safu which is something relieving but the big question is,  is the safe fund registered with an insurance company that can step in to settle customers when things go wrong?

I understand your concern but remember we are in a decentralized space and I or other users may not subscribe to the idea of registering the protection fund with any insurance company. The bureaucratic bottleneck that will follow when you want to access your funds would be enough to discourage you. I learnt that Bitget has provided its own user protection fund  wallet addresses information to the public to always view. This recent wake up call to strengthening the security of users asset is in response to FTX saga and several news of security exploitation. It will soon evolve into solid structure that will bring sanity into this space.

[Oshosondy]

I noticed that all the exchanges that I am using like Binance, Bybit, OKX, Huobi global and Kucoin all have proof-of-reserve. There are many exchanges that are having it that crypto exchange users can choose from.

Lol, Binance?
https://coinmarketcap.com/community/articles/63a2946981d6291ec15005c8/

Apart from that, Binance’s released proof-of-reserves shows a gap of 245 million dollars that claimed to be lent out (Binance claims to have collateral) to a third party and were out of bounds for Mazars. Also, Mazars did not release any reports disclosing the mechanism that it used for conducting the Binance audit.
One more important thing to note here is that, right after releasing its proof-of-reserves reports, Binance moved billions of dollars worth of funds out of its reserve wallets to unknown wallet addresses. When the questions were raised, Binance cited the on-chain activity as nothing but security measures for moving funds to secured cold wallets.

Let me guess, you actually believe the whole #SAFU thing?  

FACTS:
Japan has legislation in which customer funds be it crypto or fiat can't be moved outside designated bank accounts, Binance fled Jpana not willing to obey, FTX stayed and FTX customers in Japan have received all their money.
The US wants to have the same legislation, but Binance wants to flee and avoid it!

Think again, why don't they want that?

You are not getting me correctly, or maybe you wanted to quote another person. This was included in my post:

But people should not trust proof of reserve because it can be manipulated. We should also not be deceived and still always know that not your key not your coin. Proof of reserve can not prevent the inconveniences of many exchanges and also it can not prevent exchange hack.

I do not believe in proof of reserve and I can not. Only what I believe in is my private key.

[Vivageneviv]

I learnt that Bitget has provided its own user protection fund  wallet addresses information to the public to always view. This recent wake up call to strengthening the security of users asset is in response to FTX saga and several news of security exploitation. It will soon evolve into solid structure that will bring sanity into this space.

This is what makes the difference really, it's never enough to release proof of funds but are they verifiable? I feel safer when these exchanges go the extra mile to provide this information to the public to actually audit them.

[hugeblack]

The level of feeling that my money is safe is the half hour that follows the first confirmation of the deposit, then the exchange and then the withdrawal to my address. I also deposit small amounts of less than $ 1000 and I do not want to do KYC, all these things make me very suspicious and do not trust any platform that revolves There are rumors around them or they lie about their reserves.

Therefore, to understand it, the platforms tried to tell you that your money is safe. Do not leave your money with them for more than this half hour, or at least do not let an amount of money that you fear losing, or that it may cause you financial problems.

This sense may be different for others who wish to complete identity verification or trust regulators in their country.

[Potato Chips]

We don't know how much liabilities an exchange has hence how would we know how much of their PoR would cover? On another note, didn't some of the auditors even backed out lol?

That being said, I don't find it reliable and it honestly sounds like a gimmick to me. As a whole, it doesn't change the whole picture when it comes to the level of caution I need to have when using CEX so I don't care that much.