Crypto audits are coming back in style, but it's still a voluntary practice akin to paint-by-numbers — and without all the numbers. Call it a trust exercise.
Why it matters: This voluntary math goes through cycles of popularity (usually after things go wrong) and have become important again in the wake of a pair of large crypto lenders — Celsius Network and Voyager Digital — filing for bankruptcy reorganization. But they aren't perfect.
Proof of Reserves, or "PoR," is just one part of the equation for proof of solvency, Saravanan Vijayakumaran, an associate professor at the Indian Institute of Technology Bombay, tells Axios. "To answer your question about [the audits] being holistic — they are not holistic."
Details: Crypto audits ideally show that crypto held on deposit matches customer account balances, but to complete the equation for proof of solvency, one would need to run a proof of liabilities, in addition to custodians attesting to reserves held.
To calculate the total...
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