MicroStrategy Chair Opposes Proof-of-Reserves for Crypto Security Risks

MicroStrategy executive chair Michael Saylor expressed his opposition to institutions publishing onchain proof-of-reserves during a May 26 event at the Bitcoin 2025 conference in Las Vegas. He described the practice as a “bad idea” that increases security risks for companies holding cryptocurrency. Saylor argued that current proof-of-reserves methods are insecure and harmful to multiple parties, including issuers, custodians, exchanges, and investors.

Saylor declined to answer when asked if MicroStrategy would publish its own proof-of-reserves. The question was posed by Blockware Solutions analyst Mitchell Askew during the conference discussion. Saylor's response was clear: “It’s a bad idea.” He elaborated that publishing wallet addresses makes companies vulnerable to tracing and security breaches, as institutional security experts would not recommend such a practice.

Proof-of-reserves are transparency tools that verify companies hold enough crypto assets to cover customer deposits. These tools became popular after major exchange collapses, such as FTX and Mt. Gox, as the crypto industry sought to rebuild trust with customers and investors. Saylor acknowledged the industry's learning from these failures but disagreed with proof-of-reserves as a solution. He suggested using artificial intelligence to identify security problems with publishing wallet addresses, claiming that AI would generate “50 pages of security problems” when asked about the risks.

Many crypto companies started publishing proof-of-reserves after FTX collapsed in November 2022. The exchange’s failure highlighted the need for transparency in crypto custody and operations. Major exchanges, including Binance, Kraken, and OKX, now publish regular proof-of-reserves reports. Crypto asset manager Bitwise also adopted the practice for its exchange-traded funds. However, Saylor pointed out that proof-of-reserves show only one side of company finances. They reveal what companies hold but not what they owe to customers or creditors, providing an incomplete picture of a company’s financial health.

MicroStrategy remains the world’s largest corporate Bitcoin holder with 576,230 Bitcoin on its balance sheet. The company’s holdings are worth approximately $62.6 billion at current prices. MicroStrategy has been aggressively buying Bitcoin since 2020 under Saylor’s leadership. The company recently purchased 4,020 additional Bitcoin as the cryptocurrency’s price briefly topped $110,000.