Michael Saylor Warns: Onchain Proof-of-Reserves Is a Security Risk, Not a Solution

Michael Saylor, executive chairman of Strategy (formerly MicroStrategy), has delivered a sharp warning against the growing practice of publishing onchain proof-of-reserves, saying it introduces major security risks rather than strengthening trust.

Speaking on May 26 at a side event during the Bitcoin 2025 conference in Las Vegas, Saylor made his stance clear when questioned by Blockware Solutions head analyst Mitchell Askew.

You can see the exchange here on X (formerly Twitter):

Mitchell Askew’s Tweet

Why Saylor Thinks Proof-of-Reserves Is a Bad Idea

When asked if Strategy plans to publish its own proof-of-reserves, Saylor sidestepped the direct question but strongly criticized the concept:

“The current, conventional way to publish proof of reserves is an insecure proof of reserves. It actually dilutes the security of the issuer, the custodians, the exchanges, and the investors. It’s not a good idea — it’s a bad idea.”

Saylor argued that disclosing wallet-level information opens institutions up to:

• Targeted cyberattacks

• Fund traceability risks

• Long-term security vulnerabilities

“No institutional-grade or enterprise security analyst would think it’s a good idea to publish all the wallet addresses such that you could be traced back and forth,” he warned.

He even added, with a bit of humor, that if you asked an AI system to list the risks of publishing wallet addresses, “it would write 50 pages of security problems.”

Source: Mitchell Askew

The Rise of Proof-of-Reserves After the FTX Collapse

Following the spectacular downfall of crypto exchange FTX in November 2022, the crypto industry saw a surge in proof-of-reserves disclosures as firms rushed to reassure customers. Exchanges, custodians, and crypto-backed exchange-traded funds (ETFs) started publishing onchain proofs to demonstrate they held sufficient reserves to cover client deposits.

Big names like:

• Binance

• Kraken

• OKX

• Bitwise

… adopted the practice as part of their transparency measures.

However, Saylor pointed out a critical blind spot: proof-of-reserves only shows what a firm holds, not what it owes. Without also disclosing liabilities, it’s easy to present a misleading picture of financial health.

Saylor’s Bitcoin Strategy and Holdings

Strategy is the largest corporate Bitcoin holder in the world, with a staggering 576,230 BTC (valued at around $62.6 million) on its balance sheet.

Other major holders include:

• MARA Holdings with 48,137 BTC

• Over 110 publicly traded companies globally, according to data from BitcoinTreasuries.NET.

Despite his firm’s heavy Bitcoin exposure, Saylor remains adamant about protecting sensitive wallet-level details.

Balancing Transparency and Security in Crypto

The industry’s push for transparency, particularly after the FTX debacle, reflects a deep desire to rebuild trust. But Saylor’s warning highlights the need for crypto companies to balance openness with operational security.

Rather than relying on raw wallet disclosures, institutions may need to explore more advanced, institutional-grade transparency solutions that don’t inadvertently put themselves at risk.