[NEWS] FTX Japan releases "Proof of Solvency" to prove client assets on the blockchain

Seth Melamed, COO of FTX Japan, a domestic cryptocurrency exchange, announced on the 28th that the company has released Proof of Solvency (PoS), a blockchain technology-based proof of solvency that proves that an exchange's reserves exceed the assets held by customers.

PoS is said to be able to address the technical issue of providing more secure and transparent information to market participants who have deposited assets with exchanges and financial institutions, which is an important issue for cryptocurrency markets and traditional financial market participants.

FTX Japan has been strictly managing customer assets separately in accordance with laws and regulations, but will now introduce PoS on top of that. This will allow customers to objectively check the management status of their assets by reflecting the results of cryptographic proofs using numbers and zero-knowledge proofs, instead of authentication and assertions that can only be understood by management and operators, and by reflecting the results on the blockchain.

The PoS service is available to all customers of the FTX Japan and Liquid Japan platforms. Users will be able to check their balances with just a few clicks. Details will be published weekly on the Ethereum blockchain.

To use PoS, log in to Liquid and access the Liquid Proof of Solvency page. After that, download the latest certificate from the certificate section of the Liquid Proof of Solvency page, and if there is no record at that time, wait a while and try again.

After downloading the certificate, access the third-party certificate verification site (solvenscan.io) and update the downloaded certificate to the latest version. After uploading the certificate, click the Verify Certificate button. The balance is displayed after matching with the certificate and confirmed by the Merkle root.

You can also scroll through the entire page, and you can check other certificates by clicking the Verify Another Certificate button.

This initiative aims to restore a certain degree of user trust by issuing objective and reliable certificates. In addition, there seems to be an aim behind it to show that the action is being taken in good faith against the Financial Services Agency.

On the 8th of this month, the Financial Services Agency announced an extension in light of the approaching deadline of the domestic asset holding order issued to FTX Japan. The order requires that assets equivalent to liabilities, excluding debts owed to non-residents, must be held domestically until December 9th of this year.

Reference:Announcement by Melamed, Financial Services Agency
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