Opinion by: Lennix Lai, global chief commercial officer of OKX
More than three years after FTX’s collapse, the crypto industry must not forget that trust in our system depends on verifiable transparency. Arguably, that lesson matters more now than ever as we experience a period of volatility.
The idea behind proof of reserves (PoR) is simple yet powerful. Through transparent, onchain audits, exchanges can demonstrate that every customer balance is backed one-to-one by assets held in reserve. In the aftermath of FTX, PoR became a lifeline — a tangible way to prove that the industry was taking real steps to overcome its “Wild West” reputation.
As the market remains relatively optimistic, we have a real opportunity to make transparency the industry standard rather than the exception. Independent market analyses show that while a handful of major exchanges continue to publish monthly PoR attestations, others vary in cadence or omit such disclosures entirely. 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, which wiped out nearly $20 billion in leveraged positions, highlighted both the risks inherent in crypto and the resilience of transparent systems. The drop in open interest across perpetual decentralized exchanges told the story of leverage getting wiped out.
When prices spike and liquidity floods the market, discipline tends to give way to euphoria. Yet the lesson of 2022 remains unchanged: Transparency cannot be seasonal or optional. It must be constant, verifiable and built into the core of how the crypto industry operates.
Three years post-FTX, coincides with the third anniversary of PoR programs at major exchanges, which launched monthly attestations in response to the crisis. These attestations collectively account for tens of billions of dollars in customer assets, with overcollateralization across the most highly traded cryptocurrencies, including Bitcoin (BTC), Ether (ETH), Tether’s USDt (USDT) and USDC (USDC).
Yet public attention to PoR remains inconsistent. Recent data shows that while public interest in PoR is fading from daily conversation, it resurfaces whenever transparency becomes a systemic concern. Google Trends recorded a brief spike in searches for “Proof of Reserves” in August 2025, surpassing even the first major surge post-FTX collapse.
That renewed attention coincided 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 reserve-backing requirements for payment stablecoins and mandated monthly audited attestations — the first federal-level standards that mirror the essence of proof of reserves. These policy milestones show the direction is set; now it’s up to exchanges to lead rather than follow.
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The industry’s need for transparency extends beyond PoR. Recent headlines around opaque exchange listing practices — where projects face unclear demands for fees or token allocations — highlight this broader need for accountability. While distinct from proof of reserves, these issues underscore how a lack of transparent standards erodes confidence across the board. PoR, with its cryptographic proofs and independent audits, ensures customer funds remain secure and accessible through mathematically verifiable systems, and that same approach should extend to every aspect of exchange operations.
Credible PoR frameworks rely on technologies, like zk-STARK zero-knowledge proofs and Merkle trees, enabling anyone to verify reserves while keeping their personal data private. The goal is simple: to give customers confidence that their assets are entirely theirs and fully withdrawable. That is the essence of accountability.
The strength of crypto depends on trust, and trust can’t exist without transparency. Every exchange has an opportunity to commit to provable solvency standards, backed by independent audits and open‑source data. Customers, too, can take an active role in examining the facts instead of relying on assumptions — the tools and information are increasingly available.
Transparency alone isn’t enough. To grow sustainably, exchanges must integrate with traditional finance. Leading exchanges are already building these bridges; some have partnered with global systemically important banks to offer institutional-grade custody alongside exchange trading. Others are hiring hundreds of compliance, risk and law enforcement response experts to meet the standards of regulated finance.
We must challenge the crypto industry’s Wild West image. That means not just building bridges to regulated finance but also remembering what we learned during bear markets.
Everyone in this industry has a responsibility to strengthen their systems and take meaningful steps toward greater accountability and integration with the wider, regulated financial world.
Opinion by: Lennix Lai, global chief commercial officer of OKX.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
