Bitmex has established a system that will allow all depositors to self-verify their liabilities in the entire liability balance sheet of the crypto exchange.
According to a blog post on the exchange website, the company’s “Proof of Liability,” or PoL, the system does not involve a third-party auditor and protects customer privacy using the Merkle tree, a cryptographic data structure.
Users must get the most recent liability snapshot and install an open-source program from GitHub to self-verify liabilities on Bitmex. A brief set of commands may launch the program using the Terminal application on Mac or Linux.
Depositors may also view their nonces, arbitrary numbers that allow cross-referencing to the exchange’s stated liabilities on their individual My Account pages.
The new PoL system comes in the wake of the high-profile collapses of the crypto exchange FTX, which prompted calls for greater transparency from centralized exchanges. Prior to that, BitMEX had declared no exposure to FTX.
BitMEX, which stands for Bitcoin Mercantile Exchange, was launched in 2014 by Arthur Hayes, Ben Delo, and Samuel Reed to provide a professional-grade Bitcoin derivatives trading platform.
Operated by HDR Global Trading Limited out of Seychelles, the exchange quickly established itself as the preferred leveraged trading platform for Bitcoin traders.
In 2016, it created and launched perpetual leveraged swap contracts on Bitcoin to allow traders to trade Bitcoin futures with up to 100x leverage and no expiry date. The innovative new crypto derivative helped BitMEX become of the highest-volume Bitcoin exchanges in the world.
BitMEX is a market-leading cryptocurrency derivatives exchange that enables traders to buy and sell futures and perpetuals on a range of crypto assets. The exchange’s lack of regulatory compliance and its founders’ criminal charges in the U.S., however, may deter potential users.
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