Users’ Funds Are Safe Now – Founder Of BitMex, Arthur Hayes Says
Arthur Hayes, the founder of BitMex, recently communicated to its users that all funds are safe and that they can verify for clarity and transparency.
Proof Of Liability Verification
Arthur Hayes, the founder and former CEO of BitMex, took to Twitter to inform his followers that the firm’s funds are now very secure.
This new development with user verification is a simple and convenient process that can be carried out entirely without the involvement of third-party systems. Hayes emphasized that this new development and the company’s goal is to put users first.
According to an excerpt from Hayes’ tweet, investors can now compare their individual liability to the company’s total liability. And that, for ease of use, users can complete this process without the assistance of third-party services.
To protect investors’ privacy, BitMex has also moved to randomly split and share account balances into the Merkle tree system, which is stored under multiple roots.
Every week, a snapshot of the firm’s reserves and liabilities will be taken and released to the public on Tuesdays and Thursdays.
According to an official announcement from the firm, the Proof of Liabilities system is not a drastic reaction to the recent FTX crash. It is, however, a well-thought-out and creative system developed by the team.
This system is the first of its kind in that it allows users to verify their balances on the firm and also clarifies that these balances are included in the sum total of the firm’s balances without jeopardizing the user’s privacy.
FTX Crash Created FUD
Following the FTX crash, there has been a strong call for transparency in the crypto space. During the FTX filing proceedings, it was discovered that the exchange had loaned out a large number of investor assets while keeping this information hidden from the public.
This has fueled BitMex’s initiative to enable user verification on its platform.
Following the loss of trust in exchanges as a result of the FTX crash, crypto exchanges have taken the path of transparency. They have advocated taking screenshots and publishing proof of reserve in order to restore users’ trust in their exchange.
However, not all companies support this, as the CEO of Kraken, Jesse Powell, stated that the Kraken exchange will not do so for security reasons.
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