MEXC Partners with Hacken for Monthly Proof-of-Reserves Audits to Enhance Transparency

Key Takeaways:

• MEXC collaborates with Hacken for independent monthly Proof-of-Reserves (PoR) audits.
• The audits will provide an external record of reserves, ensuring they cannot be altered internally.
• Hacken will publish each report independently, starting in late November.
• MEXC's current reserve ratios remain above 100% across major assets.
• Merkle tree enables users to verify their assets are included in the exchange's total balances.

MEXC is taking a bold step towards enhancing transparency and user confidence by introducing monthly, independently verified Proof-of-Reserves (PoR) audits in partnership with blockchain security firm Hacken. This initiative marks a significant shift towards a more formalized and transparent framework for the exchange.

The monthly audits will add independent verification to MEXC’s existing PoR system, creating an external record of reserves that cannot be altered internally. Hacken will publish each report independently, without MEXC’s review or approval, with the first report expected in late November. The audits will focus on comparing MEXC’s reserves with user balances across major assets.

MEXC has stated that its current reserve ratios remain above 100% across major assets. Users can verify their balances through the exchange’s Merkle tree system on a dedicated proof-of-reserves page.

The Merkle tree PoR mechanism allows users to verify that their assets are included in an exchange’s total balances by checking cryptographic "hashes" instead of revealing full account data. This provides an added layer of security and privacy for users.

Hacken is a leading blockchain security and compliance company with expertise in Web3 and AI-assisted tools. Since 2017, it has worked with over 1,500 clients, including the European Commission, MetaMask, the Ethereum Foundation, and Binance.

MEXC, founded in 2018, reports serving over 40 million users across more than 170 countries and regions. CoinMarketCap data ranks the exchange ninth by trading volume, at approximately $3.65 billion.

Following the collapse of FTX in November 2022, centralized exchanges have been striving to restore user confidence. In the weeks following FTX’s bankruptcy, more than $20 billion flowed out of major platforms, according to data from CoinGecko.

Binance was among the first major exchanges to disclose its reserves after the collapse. It published an initial report on November 10, 2022, followed days later by a Merkle Tree version that allowed users to verify their Bitcoin holdings.

Around the same period, OKX, Deribit, and Crypto.com also released proof-of-reserves reports, but most disclosures were one-off snapshots rather than ongoing audits, drawing criticism from the community for offering only limited transparency.

In 2022, Kraken underwent a cryptographic audit by Armanino LLP, which verified that its Bitcoin (BTC) and Ether (ETH) holdings matched customer balances. The exchange noted that the independently validated process provided a level of transparency that legacy financial companies rarely offer.

Bybit has been utilizing Hacken to conduct PoR audits since June 2024. According to Hacken, the reviews check user liabilities, verify wallet ownership cryptographically, confirm that reserves exceed liabilities, and use a Merkle tree system that allows users to verify their own balances.