On February 22, the MEXC Global cryptocurrency exchange released your Proof of Reserves (PoR) snapshot after 45 days of trial. In a document seen by Cointelegraph, MEXC claimed that its reserve ratios for Tether (USDT), USD Coin (USDC), Bitcoin (BTC) and Ethereum (ETH) were 120.70%, 240.18%, 116.50 % and 110.53 %, respectively through the Merke tree method.
As of the February 10 snapshot date, MEXC had 232.4 million USDT, 33.0 million USDC, 1,869.0 BTC, and 12,472.0 ETH in user assets in custody. Meanwhile, the total assets held in the MEXC wallets for the four currencies were 280.6 USDT, 79.4 million USDC, 2,177.5 BTC, and 13,785.6 ETH, respectively. A MEXC spokesperson told Cointelegraph:
“MEXC will provide monthly updates on user asset data via the Merkle Tree. This test considers strong proof that our users’ assets are available for 1:1 redemption at any time. As the industry becomes more becomes more regulated, we can disclose additional data that our users need.”
The spokesperson said that the exchange also plans to establish a “MEXC Investor Protection Fund” in addition to existing measures to safeguard user assets. Prior to the announcement, MEXC published a list of wallet addresses belonging to the exchange. When asked about the regulation, the spokesperson explained that MEXC had obtained money service business licenses in the US, Canada, Switzerland and Estonia and that “clear regulatory standards are very important for the entire industry.”
While exchanges have welcomed the PoR method as an indicator of financial health, other experts disagree. Jack Graves, a law professor at Syracuse University, cautioned investors that PoRs fail to disclose other key information, such as liabilities and leverage. “You can audit how many assets a cryptocurrency exchange has on-chain, but how many are pledged as collateral? That’s much harder to find out unless you have access to their financial services, books, and records. […],” He explained.
