Binance Announces Upgrade of Proof of Reserves Verification System

Continuing the efforts in providing transparency on user funds, Binance is excited to introduce zk-SNARKs, a zero-knowledge verification method that keeps sensitive information private and more secure, to its Proof of Reserves (PoR) Verification System.

The system now includes Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARKs) which will enhance the security and transparency of the verification of its reserves.

FTXs collapse made it clear that it was necessary to confirm the existence of the assets claimed by crypto exchanges. This has led to the emergence of proof of reserves verification and crypto exchanges have been doing more to be transparent.

Binance CEO Changpeng Zhao stated that the zk-SNARKs upgrade, which was initially suggested by Ethereum founder Vitalik Buterin, will provide “more privacy and security.” According to him, “This is an important step forward in PoR technology. Anyone in the industry can take advantage of our open-source PoR system so that we can provide all users with the assurance they need to feel SAFU.”

zk-SNARKs help to prove that an entity has a certain amount of assets, without revealing any other information. It helps to verify crypto reserves while keeping sensitive information confidential.

Major crypto exchanges including Binance, Crypto.com, Bybit, and OKX were able to implement a Merkle tree-based proof of reserves system towards increasing transparency after FTX collapse.