After Binance was hacked, the crypto community spent two days arguing over “who’s responsible.” I’m more concerned with a technical detail: if a hot wallet can really be controlled by a single operations staffer, then no amount of proof of reserves can save it.
The fundamental problem with CEXs has never been “whether they have reserves,” but “who has the authority to move those funds.” The four-eyes principle and threshold signatures are the first layer when written into a white paper, the second when implemented in code, and the third when they can be externally audited.
Most exchanges stop at the first layer.
The fundamental problem with CEXs has never been “whether they have reserves,” but “who has the authority to move those funds.” The four-eyes principle and threshold signatures are the first layer when written into a white paper, the second when implemented in code, and the third when they can be externally audited.
Most exchanges stop at the first layer.
