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OKX, Bitso and Bitget discuss their liquidity in the face of FTX crisis

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Key facts:
  • “Confidence has gone down” with the collapse of FTX, say Bitget.

  • Distrust leads Binance and other exchanges to show transparency in their funds.

Julián Colombo, the new CEO of cryptocurrency exchange Bitso in Argentina, estimated that they guard 100 percent of their users’ assets. And he clarified that their business model is to earn money by charging fees to those who use their platform. In this way, he stressed that they do not use users’ funds to do business, unlike other companies, and are safe from any liquidity risk.

Colombo argued that it is important for there to be “transparency” in the industry on how Each company manages its users’ funds.. He also indicated that this responsibility lies with all participants in the ecosystem, including exchanges and regulators.

His remarks were delivered along with those of members of other exchanges of cryptocurrencies at the Labitconf conference, which CryptoNews covered, after it was revealed last week that the exchange FTX is unable to support balance withdrawal by its users.after its lack of liquidity and a hacking.

This prospect has caused a wave of fund withdrawals in the cryptocurrency market, which has dragged down the bitcoin (BTC) at two-year lows on the sidelines of the USD 15,000. With the ecosystem’s doubts about the liquidity of the exchanges, some exchanges are publishing their proof of reserves (PoR).

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An interesting thing that happened is that in 2014 we published a paper about our reserve test, but it didn’t get much coverage. At that time nobody looked at it and now everybody is talking about it. I think it will become an industry standard, and users, whether private or institutional, will start to demand more of this system.

Julián Colombo, CEO of the Bitso exchange in Argentina.

In addition, the Bybit exchange reported on Nov. 14 reported that all of its funds are secured by a 1:1 parity. And, although it did not share the addresses at which the assets are held, as well as their management data. Bitsopromised to show evidence of it.

From Bitso they warn that they have 100 percent of their users’ assets and proof of reserves will become an industry standard. Source: Labitconf.

Exchanges will show how much liquidity they have.

In the wake of the FTX crisis, “confidence has been lost,” Pablo Magro, business development manager of the OKX exchange, told the conference. Therefore, he said that the goal of industry players is now to regain it by demonstrating their liquidity through the merkle tree.

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The merkle tree, also called the “merkle tree“or “hash tree,” is a data structure composed of block hashes that summarizes all transactions made. Such a system is something that exchanges such as Binance, Bitget, OKX and others said they will soon apply to demonstrate transparency in the face of the distrust generated by FTX.

From Bitget, Mario Iemma, head of operations in LATAM and Spain, explained at the conference that through the merle tree it will be possible to see the amount of liquidity funds available to the exchange. He also stated that he expects more transparency systems to emerge in the industry.

I am quite sure that many companies will come forward to make more of these products, better and better, more transparent and more secure, to try to gain trust in the cryptocurrency ecosystem instead of degrading it as some companies have done in recent years.

Mario Iemma, head of Bitget’s operations in LATAM and Spain.

In the midst of this panorama, the exchanges Huobi y Gate reported that they have implemented the merkle system before. And, as more and more people join the trend, Binance, OKX and Buenbit have published as evidence the addresses where they hold their stocks. This occurs at the same time that others claim to have liquidity without providing evidence at the time.

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