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- Michael Saylor warned that Bitcoin proof-of-reserves may pose serious security risks rather than enhance transparency.
- He declined to disclose Strategy’s (formerly MicroStrategy’s) Bitcoin reserves, citing exposure to potential attacks.
- Saylor argued that revealing wallet addresses undermines institutional security and provides only half the financial picture.
Bitcoin bull and Strategy executive chair Michael Saylor has come out strongly against the use of on-chain proof-of-reserves for institutional players, warning that the widely praised practice may be more dangerous than it appears.
Speaking at a side event during the Bitcoin 2025 conference in Las Vegas, Saylor criticized the conventional approach to proof-of-reserves, claiming it undermines the security it aims to reinforce. “The current, conventional way to publish proof of reserves is an insecure proof of reserves,” he stated. “It dilutes the security of the issuer, the custodians, the exchanges, and the investors. It’s not a good idea; it’s a bad idea.”
Proof-of-reserves, often touted as a gold standard of transparency, allows crypto firms to verify they hold sufficient assets to back customer deposits. After the implosion of FTX and earlier disasters like Mt. Gox, the practice gained traction as a means to restore trust in the ecosystem. Prominent platforms, including Binance, Kraken, OKX, and asset manager Bitwise, have since adopted the measure.
Yet Saylor, whose company, Strategy (formerly MicroStrategy), is the world’s largest corporate holder of Bitcoin, with 576,230 BTC on its books, is not convinced. When asked by Blockware Solutions’ head analyst Mitchell Askew whether Strategy would publish its proof-of-reserves, Saylor declined to answer directly, reinforcing his stance that the practice may do more harm than good.
“Go to AI, put it in deep think mode, and then ask it, ‘What are the security problems of publishing your wallet addresses?’ and ‘How might it undermine the security of your company over time? ” He said. “It will write 50 pages of security problems.”
Saylor warns Bitcoin transparency risks
Saylor argued that revealing wallet addresses is a common component of on-chain transparency. He warned that this could expose institutions to tracking, targeted attacks, or even theft. He emphasized, “No institutional-grade or enterprise security analyst would think it’s a good idea to publish all of the wallet addresses. Doing so allows tracing back and forth.
Moreover, Saylor pointed out a critical shortcoming in the proof-of-reserves model: it shows what an entity has but not what it owes. He implied, “Publishing reserves without liabilities is only half the equation.” He alluded to how such disclosures could mislead without presenting the full financial picture.
Despite mounting pressure for institutional transparency, especially in a post-FTX world, Saylor is urging the industry to rethink its strategy. He favors robust internal security protocols over public displays of solvency.
With over 110 publicly traded companies now holding Bitcoin, the debate over transparency versus security is likely to intensify. If Saylor’s cautionary tone indicates anything, it shows that the next frontier for institutional crypto may not be radical openness. Instead, it may be strategic discretion.
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