Michael Saylor, co-founder and chairman of Strategy (formerly MicroStrategy), expressed opposition, stating that on-chain proof of reserves could pose security threats.
According to The Block on the 27th (local time), at a side event of the Bitcoin 2025 conference in Las Vegas on Monday night, when asked if Strategy plans to disclose on-chain proof of reserves, Saylor responded that it would create security threats.
Many cryptocurrency companies have widely adopted proof of reserves measures to demonstrate transparency after the FTX collapse. However, critics argue that this approach is often insufficient, as it omits audited fiat currency reserves, debt, and other key data necessary to assess the company's overall financial health.
Saylor claimed that while the cryptocurrency industry learned from the FTX failure, it is uncertain whether they learned what the institutional community will need in the future, arguing that the current method of disclosing proof of reserves is not safe. "It actually dilutes the security of issuers, custodians, exchanges, and investors. It's not a good idea. It's a bad idea," he said. "It's like publishing the addresses and bank accounts of all your children, all their phone numbers, and thinking that somehow makes the family better. It doesn't make the family better."
Saylor argued that no institutional or corporate security analyst would recommend publicly sharing wallet addresses, as this enables complete tracking of past and future transactions. He said that if you ask any AI to list risks, you would get a book's worth of vulnerabilities.
Saylor stated, "Revealing wallets becomes an attack vector for hackers, state actors, and all types of imaginable trolls," and "It creates too much liability, so you need to think twice before doing it. It's okay at a small scale, but it's not a gift from God. I think people give too much trust on X."
The Strategy co-founder also pointed out the lack of debt aspects. "If you really want cryptocurrency security and are a maximalist about it, the suggestion is to buy Bitcoin and hold it yourself. Isn't that quite obvious? If you want that, you must own Bitcoin directly," he said. "But if you're going to be a securities investor, if you invest in securities, what you want is an institutional-grade proof with asset proof and debt proof netted out. Best practice is not to reveal wallets."
He argued that the gold standard for Bitcoin asset companies like Strategy is for Big 4 accounting firms to verify both asset ownership and debt, ensuring no re-hypothecation or hidden obligations, with results signed by the CFO, CEO, and board of a public company. All would be legally liable under U.S. law. "It's far better than a simple proof of reserves wallet," he said.
Saylor continued to explain that institutional investors care much more about audited financial statements than proof of reserves, wanting 10K, 10Q, and legal liability, not just wallet balances. Omitting 10K in the public market is a huge red flag, while revealing wallets means little without knowing debt, and proof of reserves alone cannot protect against collapse.
Saylor said he would be open to implementing proof of reserves someday if it could be done with zero-knowledge proofs that completely hide wallet addresses. However, even in such a case, he would need approval from custodians, exchanges, auditors, risk managers, and company directors to ensure no security gaps, still ignoring the debt aspect.
"Revealing a simple, traceable wallet is really just a cryptocurrency parlor trick. I understand why people like it, and it's interesting if you're running an exchange," he added. "But the real lesson to learn from FTX and Mt. Gox is not to trade on unstable offshore exchanges run by immature addicts. If you're a cryptocurrency person, hold your own cryptocurrency."
On Monday, Strategy announced the purchase of an additional 4,020 BTC for approximately $427.1 million at an average price of $106,237 per Bitcoin. Strategy currently holds a total of 580,250 BTC, valued at over $63.5 billion, purchased at a total cost of approximately $40.6 billion at an average price of $69,979 per Bitcoin. This represents over 2.7% of Bitcoin's total 21 million supply and implies a book profit of around $23 billion.
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