Blockstream Proof-of-Reserves Tool for Authenticating Exchanges’ Liquidity

Blockstream Proof-of-Reserves Tool for Authenticating Exchanges’ Liquidity

Blockchain tech company Blockstream introduces an open-source tool, granting cryptocurrency exchanges a more efficient way to prove to auditors they have adequate liquidity

Called ‘Proof-of-Reserves’, the Blockstream tool lets exchanges demonstrate the number of bitcoins they can afford to spend, minus the need to prompt a ‘live’ transaction or go through the risks associated with the shifting of funds. It aims to improve transparency by creating proof of reserves for auditor verification, as stated on the company’s blog post.

Blockstream’s Proof of Reserves tool iterates upon tried-and-tested methods already used within the industry, rather than attempt to build a brand new, ‘fancy’ solution from scratch.

Blockstream, Standardizing Bitcoin Proof of Reserves

Incipiently, the tool was tailored to outfit Blockstream’s own Liquid Network. But as developers continued to research the project, they found that current methods ‘for Bitcoin reserves’ used by various exchanges ‘had room for improvement.’ Furthermore, the software can potentially be applied on a broader scope, far and wide the bitcoin network, beyond Liquid.

Doubts on the Liquidity of Exchange Platforms Streaming the Crypto Sector

The most recent exchange questioned about its liquidity is QuadrigaCX. The Canadian exchange applied for creditor protection due to losing access to its digital wallet. Some critics challenge this, alleging QuadrigaCX does not have the funds which they claim are inaccessible.

On November 2018, crypto exchange platform Bitfinex also encountered doubts on its liquidity.

Related news

Judge Appoints 2 Law Firms to Represent Quadrigacx Clients

Two law firms have been appointed to represent the clients of insolvent Canadian crypto exchange Quadrigacx in court. The number of affected users has been estimated at approximately 115,000 and lawyers will have to contact as many as they can. The digital asset trading platform owes them approximately $190 million. Also read: Hacked NZ Exchange Cryptopia Allowed to Reopen Miller Thomson, Cox & Palmer to Reach Affected Users Nova Scotia Supreme Court Justice Michael Wood issued a decision on Tuesday, Feb. 19, announcing the appointment of Toronto-based Miller Thomson and Cox & Palmer from Halifax as representatives of Quadrigacx’s clients. Both firms have extensive experience with insolvency cases, Wood said, quoted by the Canadian Press. He added that Miller Thomson has cryptocurrency-related expertise as well. It was announced that the law firms have agreed to cap their fees at this stage of the court proceedings. However, the exact fees are not mentioned in Michael Wood’s decision. The judge also approved their communication strategy. The legal teams of the two companies plan to use social media channels and online discussion groups to reach as many affected users as possible. The appointment of Miller Thomson and Cox & Palmer comes after the court accepted applications from four law firms, each representing the interests of more than 100 clients, CBC reported. The competing motions have been received since the initial creditor protection hearing on Feb. 5. The plaintiffs are owed approximately 250 million Canadian dollars (around $190 million). Varied Interests of Creditors Deemed a Challenge Quadrigacx, which is operated by the Vancouver-based company Quadriga Fintech Solutions Corp., was shut down at the end of January. Court documents suggest the platform lost access to as much as $190 million of cryptocurrency after the death of its CEO, 30-year-old Gerald Cotten. The founder of the exchange died on Dec. 9, 2018 in India due to complications from Crohn’s disease. It’s been established so far that the digital money is held in offline cold wallets and Cotten is believed to be the only person who had access to the coins. After Quadriga filed for creditor protection, the court appointed a monitor – Ernst & Young Inc. In a report to the court, the company revealed that just after its appointment the exchange team “inadvertently transferred” an additional 103 BTC to cold wallets which Quadrigacx is unable to access. Affected parties can now seek to have a committee of creditors and legal counsel to represent them. According to Judge Michael Wood, the varied interests of the different creditors are a major challenge in the court case. “The business is currently suspended and may never resume, although that remains to be determined,” he wrote in his decision. What are your expectations on future developments in the Quadrigacx case? Share your thoughts on the subject in the comments section below. Images courtesy of Shutterstock. At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more. The post Judge Appoints 2 Law Firms to Represent Quadrigacx Clients appeared first on Bitcoin News.
Bitcoin News

QuadrigaCX customers are still looking for their money; a portion might have gone missing

Ever since QuadrigaCX CEO Gerald Cotten died, clients have been trying to get their money back. The company even claimed to have opened a teller window in Laval for those who wished to withdraw cash—however, the system stopped functioning as Quadriga filed for bankruptcy, WSJ reports.The post QuadrigaCX customers are still looking for their money; a portion might have gone missing appeared first on The Block.
The Block Crypto

Hot news

By continuing to browse, you agree to the use of cookies. Read Privacy Policy to know more or withdraw your consent.