South Korea's cryptocurrency exchanges have tightened internal controls since Bithumb mistakenly paid out bitcoin in February, shortening balance reconciliation cycles to within five minutes, but critics say their external disclosures remain short on transparency. While major overseas exchanges give users tools to verify their holdings directly, investors in Korea often have to rely on figures the exchanges themselves announce.
Global exchanges including Binance, OKX and Kraken operate Proof of Reserves (PoR) systems that let users confirm whether their deposits are properly reflected in total customer assets, according to financial industry sources on the 22nd.
Binance discloses monthly figures for customer deposits, exchange holdings and reserve ratios, as well as the addresses of the wallets where the assets are kept. Using cryptographic methods such as Merkle trees, it allows users to verify for themselves that their balances are included in total customer assets. A Merkle tree cryptographically links multiple pieces of data to confirm whether specific information is part of the whole data set. OKX also provides wallet addresses and a separate verification tool so users can check on-chain wallet balances and confirm that their deposits are accounted for. Kraken likewise runs a function that verifies individual customer balances.
Domestic exchanges, by contrast, disclose relatively little. Upbit, Bithumb, Coinone and Gopax center their daily disclosures on the ratio of holdings to customer deposits. Their month-end reports list both book quantities and actual holdings, but they do not provide verification details such as wallet addresses that would allow a direct comparison. DigitalX is the only one that publishes a list of wallet addresses alongside customer deposit and total holding figures, letting users look up on-chain balances themselves.
The problem is that a holdings ratio alone leaves outsiders unable to verify the accuracy of the disclosed numbers. Even when an exchange announces that it holds more than 100% of customer assets, users have no choice but to trust the figures presented if they cannot confirm how those assets are actually stored. An official in the cryptocurrency industry said exchanges should raise the credibility of their disclosures by providing wallet addresses and balance verification tools for individual customers, as overseas platforms do.