TLDR
- Michael Saylor says onchain proof-of-reserves are a “bad idea” that create security risks for institutions
- Strategy’s executive chair believes publishing wallet addresses makes companies vulnerable to attacks
- Proof-of-reserves became popular after FTX collapse in November 2022 to show transparency
- Many exchanges like Binance, Kraken and OKX now publish proof-of-reserves to verify customer deposits
- Strategy holds 576,230 Bitcoin worth $62.6 billion, making it the largest corporate Bitcoin holder
Michael Saylor, executive chair of Strategy (formerly MicroStrategy), warned against institutions publishing onchain proof-of-reserves during a May 26 event at the Bitcoin 2025 conference in Las Vegas. The Bitcoin advocate called the practice a “bad idea” that increases security vulnerabilities for companies and their customers.
Saylor argued that conventional proof-of-reserves publishing creates an “insecure” system. He said it “dilutes the security of the issuer, the custodians, the exchanges and the investors.”
I asked @saylor if @MicroStrategy has any plans to publish on-chain proof of reserves
His answer will SHOCK you
“It’s a bad idea.”
– Security Risk
– Irrelevant without also having Big 4-audited liabilitiesCheck it out 👇 pic.twitter.com/tIxUckgbEp
— Mitchell ✝️🇺🇸 (@MitchellHODL) May 27, 2025
The executive declined to answer whether Strategy would publish its own proof-of-reserves when asked directly. His company currently holds 576,230 Bitcoin worth $62.6 billion, making it the world’s largest corporate Bitcoin holder.
Proof-of-reserves became a standard practice after several major crypto exchange failures. The transparency measure allows companies to verify they hold sufficient crypto reserves to cover customer deposits.
Rise of Transparency Measures
Many crypto exchanges and custodians adopted proof-of-reserves following FTX’s collapse in November 2022. The bankruptcy of the major exchange prompted industry players to demonstrate their financial stability through transparent reporting.
Great start to @TheBitcoinConf
It was a pleasure to meet and converse with two of the best leaders and operators in the corporate #Bitcoin world
Pretty soon every company will be a Bitcoin Treasury Company pic.twitter.com/LOEgg8VFFH
— Mitchell ✝️🇺🇸 (@MitchellHODL) May 27, 2025
Crypto exchanges Binance, Kraken and OKX now regularly publish their proof-of-reserves. Crypto asset manager Bitwise and other exchange-traded fund issuers also adopted the practice to show they hold required crypto backing for their funds.
The measure helps verify that companies actually possess the digital assets they claim to hold. This became crucial after customers lost billions when FTX filed for bankruptcy despite appearing financially stable.
Security Concerns Over Wallet Transparency
Saylor expressed concern about publishing wallet addresses publicly. He said no “institutional-grade or enterprise security analyst would think it’s a good idea” to reveal all wallet locations.
The executive suggested using artificial intelligence to analyze security problems with publishing wallet addresses. He claimed AI would identify “50 pages of security problems” with the practice.
Saylor acknowledged the industry learned from the FTX and Mt. Gox exchange collapses. However, he maintained that proof-of-reserves aren’t the right solution for institutional security.
He pointed out that proof-of-reserves typically show only assets held, not liabilities owed. This gives an incomplete picture of a company’s true financial position.
More than 110 publicly traded companies worldwide now hold Bitcoin on their balance sheets. Bitcoin mining firm MARA Holdings ranks second with 48,137 Bitcoin, according to BitcoinTreasuries.NET data.
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