Michael Saylor’s Critique on Onchain Proof-of-Reserves
Michael Saylor, the leading figure at Strategy, a prominent firm known for its significant Bitcoin acquisitions, criticized the practice of institutions publicly sharing onchain proof-of-reserves. During a discussion at the Bitcoin 2025 event in Las Vegas on May 26, he expressed concerns that this form of transparency could lead to security vulnerabilities.
“The traditional method of showcasing proof of reserves is fundamentally insecure,” Saylor stated, cautioning that such practices could jeopardize the safety of issuers, custodians, exchanges, and their clients, thus labeling it a ‘bad idea.’
Questions on Proof-of-Reserve Assets
When questioned by Blockware Solutions analyst Mitchell Askew about whether Strategy would consider publishing its own proof-of-reserve assets, Saylor opted not to provide a direct answer.
Proof-of-reserves are mechanisms commonly employed by cryptocurrency exchanges to demonstrate their asset holdings are sufficient to cover customer deposits. They are also important for verifying that entities like crypto-tracking ETFs maintain the requisite cryptocurrency amounts.
The Industry’s Push for Transparency
Following the infamous collapse of exchanges like FTX and Mt. Gox, there has been a significant push within the industry for increased transparency, with various exchanges such as Binance, Kraken, and OKX stepping up to share their proof-of-reserves. However, Saylor reminded the audience that such disclosures may only present a partial view, revealing only what institutions possess without disclosing what they owe.
Concerns Over Security Vulnerabilities
Saylor emphasized that no security analyst focused on institutional or enterprise-grade security would endorse the idea of making wallet addresses public, as this could expose significant vulnerabilities. He suggested that an AI tasked with analyzing the security implications of such practices would produce extensive warnings about potential risks.
Strategy’s Position in the Market
As the largest corporate holder of Bitcoin globally, Strategy possesses an impressive 576,230 BTC, valued at about $62.6 million. This places them ahead of other players like MARA Holdings, which controls 48,137 BTC, based on data from BitcoinTreasuries.NET. Notably, over 110 publicly traded companies have included Bitcoin within their investment portfolios around the world.
