The FTX-led market crash highlighted the need for transparency as a key metric to speed up the adoption of crypto assets. However, our analysis of the top 50 exchanges shows that not all are excited to display their books.
At the height of the debacle, a number of exchanges scrambled to announce on Twitter their proof of reserves. CoinMarketCap (CMC) took a step further to help, with its launch of a proof-of-reserve tracker, allowing users to view the total assets, public wallet addresses, balance, and value of the wallets displayed on the exchanges.
As covered in various media, crypto holders said the proof of reserves was not enough - they wanted to make sure that the information that they get is always updated, covers both assets and liabilities, and is audited by a reliable independent third party. Critics noted that having a Merkle-tree proof of reserve would be the closest to being a transparent exchange.
We looked at the top 50 exchanges on CMC and checked their websites and Twitter accounts for their statements about proof of reserves to look for what traders use as a gauge of transparency. We have also included WOO X’s transparency statement and plan in this informal survey.
<h3 id="strong-how-transparent-are-the-exchanges-so-far-strong">How transparent are the exchanges, so far?</h3>
Out of the 51 exchanges surveyed, only 18 including WOO X have proof of reserves statement that can be found either on their websites or Twitter posts. A few of those 18 exchanges have a dedicated page that talks about their proof of reserves while some posted the information directly on their Twitter pages.
Only 5 exchanges are providing live data. For example, WOO X updates its proof of reserves page every 15 minutes [screenshot below from woo]. Others such as Kraken, Korbit, and Phemex also update their page regularly at different times of the day.
<img src="https://academy-public.coinmarketcap.com/optimized-uploads/d158b94febbe41059892ac5db6906e12.png">
[screenshot of data update time from <a href="https://woo.org/proof-of-reserves/" rel="noopener noreferrer nofollow">woo.org</a>]
Twelve out of 51 exchanges that we looked at are audited by third-party auditors even though some did not provide their proof of reserves. However, we saw that some of the audit reports were done before November.
Out of 18 exchanges that have shown their proof of reserves, 7 have also displayed their liabilities, including WOO X.
<img src="https://academy-public.coinmarketcap.com/optimized-uploads/bb41ae7c991c41c1b7b2de6421e373e2.png">
[screenshot of Liabilities report from <a href="https://woo.org/proof-of-reserves/" rel="noopener noreferrer nofollow">woo.org</a>]
Of the 51 exchanges, 23 are planning or considering implementing a Merkle tree proof of reserves. A majority of them said that they believe the Merkle tree is the closest show of the actual state of reserves of a crypto exchange.
A number of those who were planning to show their proof of reserves, regardless of their methods, did not mention a timeline and simply mentioned “soon.” Meanwhile, the more committed ones including OKX provided their schedule.
Figures in this analysis are updated as of December 4th.
<h3 id="strong-redefining-transparency-woo-network-launches-first-of-its-kind-live-self-reporting-dashboard-strong">Redefining transparency: WOO Network launches first-of-its-kind live self-reporting dashboard</h3>
In a proactive response to calls for transparency among digital assets exchanges, WOO Network launched a real-time reporting of its assets and liabilities - the first in this industry.
WOO Network’s transparency dashboard, <a href="https://woo.org/proof-of-reserves/?utm_source=blog&amp;utm_medium=PR&amp;utm_campaign=Transparency" rel="noopener noreferrer nofollow">http://woo.org/proof-of-reserves/</a>, includes; live data reporting that updates every 15 mins; proof of assets and where they are held; information on liabilities; an FAQ section; and a section listing the company’s further plans to show transparency.
In formulating the dashboard, Jack Tan, Co-founder of WOO Network described WOO X as much more than a simple exchange with its ability to aggregate liquidity from top trading venues and provide this liquidity at lower fees, through well-vetted and diversified holdings on other liquidity venues.
“We arrived at this solution by coming up with a wishlist for what we want to see from other exchanges. So we are holding ourselves to the same standard and being the first to act with this type of radical transparency and live data. Our transparency dashboard is just one of the steps towards our goal of making CeFi more transparent than traditional banks and financial institutions,” Tan noted.
WOO X took the following approach to maximize transparency and timeliness, aided by on-chain proofs wherever possible:
<ul>
 <li>Real-time, verifiable information on assets and liabilities</li>
 <li>Over-collateralization of assets to liabilities to act as a buffer</li>
 <li>Users are entitled to the benefits of senior creditors to the extent of applicable laws</li>
 <li>External auditing and verification of completeness and accuracy of the methodology</li>
 <li>Conservative and diversified holdings on liquidity venues such as Binance and OKX</li>
 <li>Embracing DeFi and non-custodial trading as a fundamental solution to counterparty risk</li>
</ul>
On top of the live dashboard, Tan said WOO Network’s terms of service ensure that customers’ deposits are the most senior liability in the event of bankruptcy. The legal language also matters.
Moving forward, WOO Network is working to implement Merkle Tree proofs to verify all WOO X user assets are accounted for in liability calculations. Merkle Trees allow users to cryptographically verify that their balances are included in the complete snapshot of liabilities. Moreover, WOO Network aims to complete a financial audit by a reputable, independent third party to verify the data reported is accurate and complete.
We have also included an FAQ section, <a href="https://woo.org/proof-of-reserves/?utm_source=blog&amp;utm_medium=PR&amp;utm_campaign=Transparency" rel="noopener noreferrer nofollow">check it out here.</a>
<h3 id="stay-tuned-for-all-of-woo-network-s-exciting-developments">Stay tuned for all of WOO Network’s exciting developments!</h3>
<ul>
 <li>Socials: <a href="https://barracuda.io/woonetwork" rel="noopener noreferrer nofollow">cuda.io/woonetwork</a></li>
 <li>Website: <a href="https://woo.network/" rel="noopener noreferrer nofollow">https://woo.org</a></li>
 <li>Telegram Announcements: <a href="https://t.me/woonetworkann" rel="noopener noreferrer nofollow">https://t.me/woonetworkann</a></li>
 <li>Medium: <a href="https://medium.com/woonetwork" rel="noopener noreferrer nofollow">https://medium.com/woonetwork</a></li>
</ul>
The content above is neither a recommendation for investment and trading strategies nor does it constitute an offer, solicitation, or recommendation of any product or service. The content is for informational sharing purposes only. Anyone who makes or changes the investment decision based on the content shall undertake the result or loss by himself/herself.
The content of this document has been translated into different languages and shared throughout different platforms. In case of any discrepancy or inconsistency between different posts caused by mistranslations, the English version on our official website shall prevail.

Less than half of the top 50 crypto exchanges are showing transparency, WOO X among 5 who provide live data

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