MEXC launches “Proof of Trust”

[Natalim]

Not sure if anyone else here saw this, but I came across a Coindesk piece about MEXC. They’re pushing something they call “Proof of Trust.”
source : https://www.coindesk.com/sponsored-content/mexc-launches-proof-of-trust-campaign-to-elevate-transparency-and-user-protection-standards

What they’re saying:

1- Publishing Proof of Reserves, saying all user funds are fully backed (even “over-collateralized”).
2- Set up a $100M Guardian Fund to cover hacks or major system failures.
3- Public wallet addresses you can check on-chain.
4- Regular reports, fraud detection, and even an insurance fund for futures traders.
5- Claims they can help recover coins if you send to the wrong network or address.

On paper that all sounds decent, but I’m wondering if this is really a serious step towards transparency or just another way to polish their image.

Would you personally feel safer trading on MEXC because of this, or is it still the same old story which is “not your keys, not your coins”?

Curious if I’m the only one skeptical here, so I’d like to hear what others think.

[God Of Thunder]

On paper that all sounds decent, but I’m wondering if this is really a serious step towards transparency or just another way to polish their image.

Would you personally feel safer trading on MEXC because of this, or is it still the same old story which is “not your keys, not your coins”?

This is nothing new. Probably they are doing it for the first time, but you can actually verify most of the exchanges reserves and the data is available online. Just go to coinmarketcap.com/rankings/exchanges/ and click on exchanges. https://coinmarketcap.com/rankings/exchanges/ if you visit any exchange page, you will be able to see the financial reserve section, where you can even verify from the blockchain. So I am not sure why they will have to promote this suddenly, but as I said, this is nothing new.

Once again, not your keys, not your coins. Do not trust exchanges with large funds.

[Natalim]

On paper that all sounds decent, but I’m wondering if this is really a serious step towards transparency or just another way to polish their image.

Would you personally feel safer trading on MEXC because of this, or is it still the same old story which is “not your keys, not your coins”?

This is nothing new. Probably they are doing it for the first time, but you can actually verify most of the exchanges reserves and the data is available online. Just go to coinmarketcap.com/rankings/exchanges/ and click on exchanges. https://coinmarketcap.com/rankings/exchanges/ if you visit any exchange page, you will be able to see the financial reserve section, where you can even verify from the blockchain. So I am not sure why they will have to promote this suddenly, but as I said, this is nothing new.

Once again, not your keys, not your coins. Do not trust exchanges with large funds.

There’s some similarity, but what MEXC offers is more comprehensive since it’s more transparent. They allow independent audits, wallets can be verified, and on top of that they mentioned insurance. The exchanges you listed in your link only show basic info and an address, nothing that really gives users confidence about protection.

What I’m saying is, the insurance alone makes a big difference. If the exchange ever goes dark or gets hacked and can’t recover, at least there’s an insurance company that will cover the users.

[Oshosondy]

2- Set up a $100M Guardian Fund to cover hacks or major system failures.

This amount is small in my opinion, but maybe they will add more to it later.

5- Claims they can help recover coins if you send to the wrong network or address.

I have sent USDT like 3 times to MEXC but I forgot to put the tag because I sent the token to an exchange which is MEXC. MEXC helped me recover the tokens the three times. I can remember that all happened last year but I later decided not to use USDT on Ton blockchain. I am always surprised if some people complained about the exchange because the story is different for me.

[Natalim]

2- Set up a $100M Guardian Fund to cover hacks or major system failures.

This amount is small in my opinion, but maybe they will add more to it later.

Maybe, because even though they have billions in trading volume, if you look at the hack amounts from other exchanges in the past, I think $100 million would already be enough. And that’s just their in-house funds. I believe they also have insurance, which is kind of standard for exchanges now.

5- Claims they can help recover coins if you send to the wrong network or address.

I have sent USDT like 3 times to MEXC but I forgot to put the tag because I sent the token to an exchange which is MEXC. MEXC helped me recover the tokens the three times. I can remember that all happened last year but I later decided not to use USDT on Ton blockchain. I am always surprised if some people complained about the exchange because the story is different for me.

you proved their claimed is correct.

[hugeblack]

It's a rebranding of Proof of Reserves + Secure Asset Fund for Users (SAFU)^[1], concepts that existed on Binance. However, these funds only guarantee 10% at best, so there's nothing new, just a rebranding.
Trust comes with rules similar to what happens with banks and until that happens it is better to withdraw your money after trading.

[1] https://academy.binance.com/en/glossary/secure-asset-fund-for-users

[Natalim]

It's a rebranding of Proof of Reserves + Secure Asset Fund for Users (SAFU)^[1], concepts that existed on Binance. However, these funds only guarantee 10% at best, so there's nothing new, just a rebranding.
Trust comes with rules similar to what happens with banks and until that happens it is better to withdraw your money after trading.

[1] https://academy.binance.com/en/glossary/secure-asset-fund-for-users

Yes, in terms of funds involved it’s quite similar, and I think SAFU funds are even bigger than what MEXC has allocated for their campaign. However, there are other factors (not just monetary) that add transparency and more user protection, which I believe Binance hasn’t really stated clearly on their side.

[Rikafip]

Would you personally feel safer trading on MEXC because of this, or is it still the same old story which is “not your keys, not your coins”?

There is absolutely nothing that any crypto exchange can do to make me disregard "not your keys, not your coins" rule. No matter how big they are and who is behind them.

Hell, you can even say that about banks, and they are way more regulated than any crypto exchange (at least in the part of the world where I am from).

[mindrust]

Nobody should give a damn as long as they do KYC/AML checks. It might be a good thing if you somehow can't get away from the centralized exchanges but again, as long as binance, coinbase and kraken exists; who cares about mexc? Instead of using any of those, I'd rather do p2p trades or use one of those noKYC automated exchanges. (eXch-likes) Since eXch is no more, you can take a look at oragefren.com which has many great alternatives listed on their website. I believe some users in the forum also offer p2p trades but do it with your own risk. If everything else fails, go use a real decentralized exchange, bisq.

[hugeblack]

However, there are other factors (not just monetary) that add transparency and more user protection, which I believe Binance hasn’t really stated clearly on their side.

you mean

3- Public wallet addresses ....
4- Regular reports, fraud detection,......
5- Claims they can help recover coins ......

These things are useless in the event of a hack. Once a hack occurs, withdrawals are suspended, and it doesn't matter how quickly you receive the news.

Recovering coins if you send to the wrong network is something most platforms do, but they avoid announcing it because it requires additional effort.

Since eXch is no more, you can take a look at oragefren.com which has many great alternatives listed on their website. I believe some users in the forum also offer p2p trades but do it with your own risk. If everything else fails, go use a real decentralized exchange, bisq.

True, but these services do not meet the needs of some traders as well as Binance, Coinbase and Kraken do.

[rat03gopoh]

5- Claims they can help recover coins if you send to the wrong network or address.

I hope the process is as easy as they claims it, and they can offer free recovery for small amounts. If so, I think this would be a unique offering among the top exchanges.

MEXC helped me recover the tokens the three times.

This is a new twist on the story for me. What's the smallest amount you've recovered and what did they require?

[Darker45]

Why, can the list even change the "old story which is “not your keys, not your coins”? What they're doing isn't even touching the rationale behind 'not your keys, not your coins'. There's absolutely no point comparing what this exchange is doing with the 'not your keys, not your coins' standard.

The fact remains that they're a centralized exchange, a third party, in full control of other people's funds; can restrict functions, freeze funds, lock accounts, ban users, and so on and so forth for the fun of it.

As a matter of fact, this isn't even astounding. This paid article is only saying the exchange is starting to catch up.

[God Of Thunder]

What I’m saying is, the insurance alone makes a big difference. If the exchange ever goes dark or gets hacked and can’t recover, at least there’s an insurance company that will cover the users.

If they keep the funds with a third-party company, this is good. But I don't know how trustworthy those companies would be. What will be the procedure to claim the funds if something happens? How will a user prove how much they have in their account, etc.? If I am not wrong, Binance once kept some funds to back their stablecoin, BUSD. Later, they moved the funds, which never came back to the wallet. Usually, they do not announce that.

Imagine that MEXC would get back the funds once their advertisement is done, and there would be no announcement. Nobody would know about it. So these are nothing. If you want to use them, use them. Don't think about the insurance.