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> is there any other kind? Yes. Kraken. > regular Proof of Reserves audits make it easy for clients to verify the balances they hold are backed by real assets
by codetrotter 4y ago
> is there any other kind?
Yes. Kraken.
> regular Proof of Reserves audits make it easy for clients to verify the balances they hold are backed by real assets, all with just a few easy clicks in their account.
https://www.kraken.com/proof-of-reserves https://www.kraken.com/proof-of-reserves
- senttoschool 4y agoProof of Reserves means nothing without liability. You can have reserves of 100 billion but your liability is 200 billion.
- codetrotter 4y ago> Proof of Reserves means nothing without liability Kraken knows this. > Kraken voluntarily conducted the industry’s first Proof of Reserves audit and set a legitimate standard by accounting for not only our crypto balances, but also our client liabilities under the supervision of an independent auditor. https://blog.kraken.com/post/16592/proof-of-reserves-or-proof-of-nothing-there-is-no-in-between/ https://blog.kraken.com/post/16592/proof-of-reserves-or-proo...
- senttoschool 4y agoSo where is Kraken's liabilities audit from a reputable firm? Please no no-name firms.
- deleted 4y ago[deleted]
- landoftheice 4y ago[dead]
- DannyBee 4y agoI'm definitely in the "crypto is silly and a drag on the world" camp, but this is actually not a reasonable request. The big 4 accounting firms have all stated they won't take on more crypto audits. So have like the next 20 :) That is true whether you're trying to do it right or not (IE It is independent of whether you are in the 0.1% of this stuff that is not a scam). It's not reasonable to ask them to do something impossible, and then point out that they can't do it as proof of fraud. That's true even if it's impossible because of worries about fraud :) It's instead reasonable to ask them to do what they can. IE "Prove you aren't fraudulent by getting the big 4 to audit your liabilities" - "The big 4 won't take on more crypto audits due to worry about fraudulent companies and their own reputation" - "See, you are fraudulent!" Does not work as an argument.
- kortilla 4y agoThey’ve only stated that because it’s not obvious there are any big legit crypto companies. If kraken looked fully above board, the big 4 accounting companies would be willing to take it on as a client.
- karamanolev 4y agoI don't like crypto and I don't fully buy the Kraken audits, but man, are the Big 4 also full of s**. I wouldn't say any legit (if such exists) crypto firm can do anything to be taken on as a client at this point.
- TheOtherHobbes 4y agoWhich is ironic because the Big 4 are not known for aggressive auditing. There have been plenty of cases in trad-fi where a positive audit was followed by collapse, and sometimes evidence of criminality.
- WrtCdEvrydy 4y ago> There have been plenty of cases in trad-fi where a positive audit was followed by collapse, and sometimes evidence of criminality. I mean, audits should trigger a collapse... I assume once people inside realize the audit passed, they'll be more blatant and likely to blow up their scheme.
- seviu 4y agoReputable firms will not touch anything related to crypto. They are not allowed to.
- mhluongo 4y agoThey are and they have. Many stopped after FTX as a policy. Poor risk/reward tradeoffs.
- sobkas 4y ago> So where is Kraken's liabilities audit from a reputable firm? Please no no-name firms. There is no such thing as reputable audit firm. They will do whatever audited firm wants because they want to get paid for more audits.
- senttoschool 4y agoSure, if the firm is willing to put their entire reputation on the line to get more of your business. KPMG, PwC, Deloitte, and E&Y are very unlikely to destroy their reputation for your little business.
- karpierz 4y ago> Kraken knows this. Clearly, because they won't attest to liabilities (IE, how much money do they owe in total), but "client liabilities" (IE, how much money do they owe to their customers). If they took out a loan for 100M, with their client's assets as collateral, that won't be covered by "client liabilities", but it sure as hell will be a problem when that loan gets called in.
- b3lvedere 4y agoLooks to me that is not so different from 'normal' banks
- polygamous_bat 4y agoExcept "normal" banks are regulated with a history of regulation going back for more than a century.
- zorked 4y agoAnd as we know this system has been working perfectly.
- matheusmoreira 4y agoRegulate crypto exchanges then. They're just banks in disguise.
- kragen 4y agodisclaimer: no relation
- notch898a 4y agoNot to distract, as these are all valid concerns, but why on earth is anyone leaving anything on an exchange for longer than it takes for the deposit, transaction, and withdrawal to clear.
- kragen 4y agopossibly so they can engage in other transactions with other users of the same platform without waiting for half an hour (lightning or ethereum would also solve this problem, but binance has more users despite being a company instead of a protocol)
- JenrHywy 4y agoTo save on transaction fees perhaps, or to because they don't want to run the risk of looking after their own keys.
- jacquesm 4y agoBecause they might have to pay taxes on it.
- jackstraw14 4y ago> why on earth is anyone leaving anything on an exchange for longer than it takes for the deposit, transaction, and withdrawal to clear. I've never advised my dad to take his crypto off of Coinbase, and he's been keeping it there safely for about six years at this point. It's the best place for him to keep it, for better or worse. I'm not there to transfer everything to a ledger as he trades, and I also don't really want to take responsibility for all of his funds anyway. If he started trading on Binance US (not gonna happen) then I would probably just tell him to send it to Coinbase. I don't keep my crypto on exchanges, but for a lot of people, it really is better than the alternatives.
- vkou 4y agoBecause they are day-trading, and if everyone stopped day-trading, all of these exchanges would collapse overnight. They can't sustain themselves off people buying coins once a year.
- Cthulhu_ 4y agoThat's cool of them, let's hope that is never put to the test. Let's see where this Binance thing goes as well.
- seviu 4y agoI would say Coinbase, which is on the stock exchange, and is highly regulated just because of that. Kraken as well. They don’t play the game other exchanges such as Binance play and are happy to function just an ordinary simple exchange. However it’s difficult to know since they are not a public company and proof of reserves means nothing without knowing how much debt the exchange has. I don’t want to defend Binance. They are shady and they deserve to go down, but there is no week that goes buy that the USA does not sue anybody or closes a crypto friendly bank such as Signature. Off ramps are all crippled. The European Parliament wants to limit the amount you can deposit to a private wallet. It’s non stop to the point I personally laugh every time. All this feels to me like a coordinated non stop attack and it already has a code name, operation chokepoint 2.0 In all fairness I wish HN was a bit more friendly to crypto specially to Ethereum which has switched to a more ecologically friendly model, that is innovating in regard to zk proofs… Specially in a month that Shanghai upgrade launches, and the probability that the SEC fills a lawsuit against the Ethereum Foundation will exponentially grow.
- pavlov 4y ago> "I wish HN was a bit more friendly to crypto specially to Ethereum which has switched to a more ecologically friendly model" "Why are you so upset now that you found out I'm stealing grandma's savings? Don't you know I stopped beating my wife already. Also I'm doing much less meth these days. A man don't get no respect around here." -- crypto, the deadbeat cousin of actual tech.
- concordDance 4y agoHow exactly is eth stealing anything from anyone?
- pavlov 4y agoIt's primarily a Ponzi Construction Kit.
- alangibson 4y ago
- Nursie 4y agoProof of reserves in itself is not proof of very much if the exchange has undisclosed liabilities and costs, which may supersede the claims of depositors in case of insolvency/bankruptcy.
- londons_explore 4y agoDo Krakens proof-of-reserve audits protect against some other bitcoin exchange using the exact same coins to also produce an audit for a different set of customers?
- fredgrott 4y agoYou do understand that proof of reserves is the opposite of what is being claimed right? Ah, ah, the accounting firm that use to do those engagements even stated thus in its refusing to do more of them. What is required to proof reserves is a full audit instead, which no shady speculator will do which is in fact what all these 'exchanges' are which also means your crypto is at full loss category if you are using them.
- belter 4y agoWhy do I think this comment will age like spoiled milk? "Coinbase, Kraken Under Investigation by US Regulators" - https://bitcoinmagazine.com/legal/coinbase-kraken-face-us-investigation https://bitcoinmagazine.com/legal/coinbase-kraken-face-us-in... "Kraken Pauses Deposits, Withdrawals As Investigation On Fidor Bank Funding Continues" - https://thedeepdive.ca/kraken-pauses-deposits-withdrawals-as-investigation-on-fidor-bank-funding-continues/ https://thedeepdive.ca/kraken-pauses-deposits-withdrawals-as...
- dylkil 4y ago"for allegedly listing unregistered securities" Hasn't coinbase repeatedly asked the SEC which tokens were securities and have yet to get answer... I don't think SEC strong arming is any indication of shadiness.
- CPLX 4y agoThe answer is all of them except maybe Bitcoin and Ethereum. The legality of all this isn’t confusing to anyone it’s just that they don’t like that answer.
- seviu 4y agoWhat I find fascinating is that CFTC claims Ethereum is a commodity. Meanwhile SEC says Ethereum is a security. Specially after the move to PoS. It doesn’t seem they can even agree with each other.
- discodave 4y agoWhy not? Gold is both a commodity and a security (think gold ETFs). This logic seems like wishful thinking that people can't get rekt by both the SEC and CFTC, they can.
- koolba 4y agoBut each of those is a separate thing. Gold the commodity is traded and regulated differently than a gold ETF. Just because they’re both related to the metal does not mean a single regulatory body has dominion over both.
- SideQuark 4y agoKraken refused compliance with NY crypto exchange protection rules. Kraken had to shut down (in the US) some aspects because they refused to follow SEC guidelines for protecting user deposits. Kraken has had to pay fines for unregistered margin trading. These are not the actions of a company following best practices for protecting depositors.
- Yizahi 4y agoKraken uses misleading language in their blog, while claiming to do "audit" everywhere they actually write that they (Kraken) do the audit and then some no-name firm "verifies" audit results. So that's practically a pointless claim and provides zero data as to what are financials of the Krakes, do they have reserves matching liabilities, do they commingle funds, do their reserves consist of shittokens or no etc. Interestingly r/CC community bought Kraken misinformation hook, line and sinker. In a few years they will cry that nobody has warned them, after it will be Kraken's turn to go bust.
- xwolfi 4y agoKraken is run like a cult for miserable employees! Proof of reserve are worthless: show us the liability balance.
- artursapek 4y agoYes, we take this very seriously at Kraken. We're even trying to launch a full-reserve US bank! :-)