Experience What Makes CoinEx So Secure In Light Of The FTX Collapse

The financial system worldwide normally operates in a highly opaque and undercollateralized manner. It can be one of the reasons why systemic risks are created, resulting in those market-wide failures and boom-and-bust cycles. While cryptocurrency and blockchain systems have often been touted as the end-all, be-all solution to such dilemmas, they have had their fair share of mishaps.
Last year, the cryptocurrency sector witnessed quite a number of incidents that involved security breaches or outright frauds. In what can only be described as a series of cascading failures, investor confidence in the cryptocurrency space has been severely dampened, with many institutional and individual investors still not being able to get their funds back from FTX, Three Arrows Capital, and some of the other failures.

What CoinEx has to offer?
In the wake of these recent cryptocurrency mishaps, CoinEx has taken all the measures it can to help its users understand that the platform is transparent with their assets. To that end, it launched its very own proof-of-reserve to reassure its investors about the safety of their assets while promoting the healthy, sustainable development of the cryptocurrency sector. As of now, its proof-of-reserve covers SHIB, USDC, USDT, CET, ETH, and BTC, with more cryptocurrencies to be covered in the future.

Why Proof of Reserves?
Proof-of-reserves can be completed by third-party auditors who generate a snapshot of every balance of the company to exhibit transparent "proof," which shows that the cryptocurrency firm has assets that can fully cover its liabilities. This can provide consumers with a sense of confidence that the firm is not under threat from liquidity crises and that they can withdraw their tokens at any given time.
As for CoinEx, since its inception in 2017, it has experienced zero security accidents, all the while realizing a reserve rate of 100%. Through its Merkle tree data structure, the sum of every user's balance can be aggregated without exposing any personal information, keeping both transparency and security in mind. Moreover, such checks and balances can ensure that any cryptocurrency firm, including CoinEx, has the assets it needs in reserve, which can serve every user as it maintains liquidity regardless of what conditions the market is going through. So, users can rest assured that the CoinEx platform has their assets completely insured from any sort of liquidity crunch, i.e., it boosts trust in a sector that is unfortunately notorious for such scandals.

Final Thoughts
For any cryptocurrency firm, proof-of-reserves can be a worthwhile endeavor, ensuring the safety of users' funds and cryptographically proving that they have ample liquidity. As more regulation for the cryptocurrency sector is poised to be introduced, any firm or exchange, such as CoinEx, that acts as custodians on behalf of the users can immensely benefit from such implementations. This is why CoinEx has taken such steps to bolster customer confidence or trust, as it feels that such endeavors are something that the cryptocurrency sector can never have enough of.