A new report by CryptoQuant ranks the transparency of five major crypto exchanges based on their proof-of-reserves (PoR) practices.

The analysis revealed that Binance is leading, while other players like Bybit, OKX, Kraken, and Coinbase are trailing.

The PoR Rankings

The survey evaluated each exchange’s reserve ratio, a metric calculated by dividing the net customer balance by the platform’s total balance. Binance ranked first in transparency, consistently maintaining a coverage level above 100% and releasing its PoR reports on a monthly and timely basis.

OKX followed closely behind, also reporting a capital backing rate that remains above 100%. However, the figure is slightly below Binance’s. The exchange also publishes its disclosures monthly and without delay.

Bybit came in next on the list, with a reserve ratio ranging between 105% and 115%. The platform recently improved its disclosure practices by shifting from bi-monthly to monthly reporting.

CryptoQuant gave Kraken the fourth spot, with the exchange maintaining backing figures above 100%. However, it has only published four reports since November 22, 2022, with CQ’s analysis highlighting the need for more regular updates.

Coinbase is ranked last, as the exchange has not published any PoR report. Analyst Maartun described this trend as a major shortcoming, especially given the company’s size and market position.

Coinbase Fails to Reveal Reserves

The CryptoQuant quick take noted that Binance and OKX are currently setting the industry standard due to their strong reserve coverage and consistent, on-time reporting.

Despite a few gaps that need to be filled, Bybit and Kraken are also making progress. However, Coinbase stood out as the only exchange among the five reviewed that has yet to offer any PoR data.

Proof-of-reserves is a method used by crypto exchanges to show that they hold enough digital assets to cover customer deposits. The transparency measure became popular among institutions after big crypto platforms like FTX and Mt. Gox collapsed, leaving investors unsure whether their funds were safe.

Despite growing adoption, the practice has also been criticized by some notable crypto industry figures. Strategy’s Michael Saylor recently called it a “bad idea.” He argued that disclosing wallet addresses, often part of the PoR process, introduces serious security risks.

According to the Bitcoin enthusiast, no professional security team would recommend making wallet structures public. He further claimed that if AI were asked to evaluate the risks posed by the practice, it would produce 50 pages of potential threats.