Bitget reserves top $1.44B, claims to be debt free

Cryptocurrency exchange Bitget says its total proof-of-reserves ratio has reached 223%. In a July 13 announcement, Bitget revealed that its total reserve currently stands at $1.44 billion spread across 31 different crypto assets. Reserve ratios for Bitcoin (BTC), Tether (USDT), Ether (ETH), and USD Coin (USDC) stand at 454%, 135%, 171% and 2,604%, respectively.

In an interview, Bitget executives told Cointelegraph that the exchange “operates without relying on debt or users’ funds for its transactions or investments,” and that the company is “proud to be debt free.“ The firm wrote:

“Bitget has no outstanding debts or liabilities and is not listed as a creditor for any recently bankrupt companies.“

When asked about the high collateral for select coins, the exchange explained that the money comes from profit through transaction fees, and returns through investments and acquisitions. The exchange does not have external insurance for its users; however, it does operate a $300 million User Protection Fund that executives claim functions better than third-party insurance:

“This enables us to efficiently cover users’ assets without depending on external bureaucracy or policy changes.“

Though not yet a regulatory requirement, Bitget seeks to increase the number of partnerships with third-party auditors to examine its assets and reserves. The exchange updates its proof-of-reserves every month.

While proof-of-reserves has become popular as means of disseminating information on exchange assets in the aftermath of cryptocurrency exchange FTX’s collapse, experts have cautioned on its effectiveness. Jack Graves, professor of law at Syracuse University, previously warned that “you can audit how many assets a crypto exchange has on-chain, but how much of it is pledged as collateral? That’s a lot harder to figure out unless you have access to their financial services, books, and records.“

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Magazine: Can you trust crypto exchanges after the collapse of FTX?

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Written by Zhiyuan Sun on 2023-07-13 13:30:00.

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