Opinion: Lennix Lai, OKX Global Chief Commercial Officer
More than three years after the collapse of FTX, the cryptocurrency industry must remember that trust in our system relies on verifiable transparency. Perhaps that lesson is more important than ever now that we are experiencing a period of uncertainty.
The idea behind Proof of Reserve (PoR) is simple but powerful. Through transparent on-chain audits, exchanges can prove that all customer balances are 1:1 backed by retained assets. In the aftermath of FTX, PoR became a lifeline. This is a concrete way for the industry to demonstrate that it is taking serious steps to overcome its “wild west” reputation.
As the market remains relatively optimistic, there is a real opportunity to make transparency the industry standard rather than the exception. Independent market analysis shows that while a small number of major exchanges continue to issue monthly PoR certificates, other exchanges vary in frequency or omit such disclosures altogether. History reminds us that bull markets are a way to test our discipline. This is a moment that proves that cryptocurrencies are moving beyond their “Western” origins.
October’s “flash crash” wiped out nearly $20 billion in leveraged positions, highlighting both the risks inherent in cryptocurrencies and the resilience of transparent systems. The decline in open interest across permanently decentralized exchanges indicated that leverage was disappearing.
When prices soar and liquidity floods the market, discipline tends to give way to euphoria. But the lesson for 2022 remains the same. Transparency cannot be seasonal or optional. It must be constant, verifiable, and built into the core of how the cryptocurrency industry operates.
Three years after FTX coincides with the third anniversary of the major exchanges’ PoR programs, which began monthly certifications in response to the crisis. These certificates are overcollateralized across the most heavily traded cryptocurrencies, including Bitcoin (BTC), Ether (ETH), Tether’s USDt (USDT), and USDC (USDC), collectively accounting for tens of billions of dollars in customer assets.
However, public attention to PoR remains inconsistent. Recent data shows that public interest in PoR is fading from everyday conversations, but resurfaces whenever transparency becomes an organizational concern. Google Trends recorded a brief spike in searches for “Proof of Reserves” in August 2025, even surpassing the first significant spike following the FTX collapse.
This renewed focus coincided with major policy milestones centered around solvency and disclosure, including the passage of the CLARITY Act and the GENIUS Act in July 2025. These laws introduced 1:1 reserve backing requirements for payment stablecoins and mandated monthly audited attestations. This is the first federal level standard to reflect the true nature of reserve certification. These policy milestones indicate that the direction is set. It is now up to exchanges to lead rather than follow.
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The industry’s need for transparency extends beyond PoR. Recent headlines about opaque exchange listing practices highlight the need for this broader accountability when projects face unclear demands for fees and token allocation. These issues are different from proving reserves, but they highlight how the lack of transparent standards undermines trust overall. PoR ensures the safety and accessibility of customer funds through a mathematically verifiable system with cryptographic proofs and independent audits, and the same approach should extend to all aspects of exchange operations.
Trusted PoR frameworks rely on technologies such as zk-STARK zero-knowledge proofs and Merkle trees to allow anyone to verify reserves while preserving the privacy of personal data. The goal is simple. It is about giving customers the confidence that their assets are completely theirs and can be fully withdrawn. That is the essence of accountability.
The strength of cryptocurrencies relies on trust, and trust cannot exist without transparency. All exchanges have the opportunity to adhere to provable solvency standards backed by independent audits and open source data. Customers can also take an active role in researching the facts rather than relying on assumptions. Tools and information are becoming increasingly available.
Transparency alone is not enough. To grow sustainably, exchanges must integrate with traditional finance. Major exchanges are already building these bridges. Some have partnered with the world’s systemically important banks to provide institutional-grade custody services alongside currency trading. Some companies employ hundreds of compliance, risk, and law enforcement professionals to meet regulated financial standards.
We must challenge the Wild West image of the crypto industry. It means not only building a bridge to regulated finance, but also remembering what we learned in the bear market.
Everyone in this industry has a responsibility to strengthen their systems and take meaningful steps toward increased accountability and integration with the broader regulated financial community.
Opinion: Lennix Lai, OKX Global Chief Commercial Officer.
This article is for general informational purposes only and is not intended to be, and should not be taken as, legal or investment advice. The views, ideas, and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
