Opinion of: Lennix Lai, Global Chief Commercial Officer of OKX
More than three years later The fall of FTXthe crypto industry must not forget that trust in our system depends on proven transparency. Ironically, that lesson is even more important today than when we are experiencing a period of volatility.
The idea behind proof of reserves (POR) is simple but powerful. Through transparent, onchain audits, exchanges can demonstrate that each customer balance is backed individually by assets held in reserve. After FTX, Por became a lifeline – a tangible way to prove that the industry is taking real steps to overcome its “Wild West” reputation.
While the market remains relatively optimistic, we have a real opportunity to make transparency the industry standard rather than the exception. Independent market reviews show that while a number of major exchanges continue to publish monthly POR statements, others vary in cadence or have omitted said disclosure. History reminds us that Bull markets have a way of testing our discipline – This is our moment to prove that crypto has moved beyond its “wild west” origins.
The “Flash Crash“In October, wiping out nearly $20 billion in leveraged positions, that highlighted both the risks inherent in crypto and the robustness of transparent systems. The collapse of open interest across the ongoing decentralized exchange told the story of the accumulation being wiped out.
When prices spike and liquidity floods the market, discipline tends to give way to euphoria. However the lesson of 2022 remains unchanged: transparency cannot be periodic or optional. It must be consistent, proven and built into the core of how the crypto industry operates.
Three years post-FTX, coincides with the third anniversary of the POR programs on the major exchanges, which launched monthly testimony in response to the crisis. These proofs collectively account for tens of billions of dollars in customer assets, with overcollateralization across the most highly traded cryptocurrencies, including Bitcoin (BTC), Ether (Eth), USDT by Tether (USDT) and USDC (USDC).
But public attention to POR remains uneven. Recent data show that while public interest in POR has faded from everyday conversation, it has revived whenever transparency becomes a systemic concern. Google Trends recorded a brief spike in searches for “proof of reserves” in August 2025, outpacing even the first major post-FTX downturn.
This renewed focus coincides with major policy milestones centered on solvency and disclosure, including the clarity and genius acts passed in July 2025. These laws introduced one-to-one back-up requirements for payment stablecoins and mandated monthly audited attestations—the first standards at the federal level that reflect the essence of proof of reserves. The rules of this policy show the direction that is set; Now it’s up to the exchange to lead instead of follow.
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The industry’s need for transparency extends beyond the POR. Just recently The titles around skills on the Opaque exchange list – Where projects face unclear demands for fees or token allocations – highlight the wider need for accountability. While distinct from proof of reserves, these issues underscore how a lack of transparent standards erodes trust across the board. The POR, along with cryptographic proofs and independent audits, ensures that customer funds remain safe and accessible through mathematically proven systems, and the same approach should be extended to every aspect of the exchange’s operations.
Credible POR frameworks rely on technologies, such as ZK-stark zero-knowledge proofs and merkle trees, that allow anyone to verify reserves while keeping their personal data private. The goal is simple: to give customers the confidence that their assets are completely theirs and completely reversible. That is the essence of accountability.
The strength of crypto depends on trust, and trust cannot exist without transparency. Each exchange has the opportunity to work on proven solvency standards, supported by independent audits and open source data. Customers, too, can take an active role in analyzing the facts instead of relying on assumptions – tools and information are increasingly available.
Transparency alone is not enough. To grow, exchanges must be integrated with traditional finance. Leading exchanges are already building these bridges; Some have partnered with globally significant banks to offer institutional-grade custody alongside exchange trading. Others have hired hundreds of compliance, risk and law enforcement response experts to meet the standards of regulated finance.
We must challenge the Wild West image of Crypto. This means not only building bridges to regulated finance but also remembering what was learned in bear markets.
Everyone in this industry has a responsibility to strengthen their systems and take significant steps towards greater accountability and integration into the wider, regulated world of finance.
Opinion of: Lennix Lai, Global Chief Commercial Officer of OKX.
This article is for general informational purposes and is not intended to be and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
