Kraken co-founder Jesse Powell criticizes Binance’s PoP system

Kraken co-founder Jesse Powell criticized Binance’s Proof-of-Reserve (PoP) system.According to Powell, a full PoP audit should include the amount of liabilities.“Merkle’s tree is just manual nonsense without an auditor to make sure you don’t include accounts with negative balances. The statement of assets is meaningless without liabilities,” he stated.Powell also rebuked CoinMarketCap for sharing the service’s incomplete list of exchanges’ reserves. He reiterated the point that reserves are not a list of wallets, but assets minus liabilities.“The whole point is to see if an exchange has more assets than it owes customers. Adding a hash to a string identifier is useless without everything else,” he noted.Moreover, he asked the media and journalists to refrain from “overestimating and misleading consumers.” Instead, he recommended that they take the time to understand the motive for confirming the reserves.In response to the accusation, Binance CEO Changpeng Zhao said his company had already planned to bring in third-party auditors to review the reserve confirmation system.