Michael Saylor: Onchain Proof-of-Reserves a “Bad Idea” for Institutions Due to Security Risks
Michael Saylor, executive chairman of Bitcoin-buying firm Strategy (formerly MicroStrategy), has expressed strong opposition to the idea of institutions publishing onchain proof-of-reserves, calling it a “bad idea” that introduces significant security vulnerabilities.
Speaking on May 26 during an event at Bitcoin 2025 in Las Vegas, Saylor addressed the rising trend of transparency in crypto holdings. When asked whether Strategy would consider disclosing its Bitcoin wallet addresses or reserves onchain, Saylor declined to commit and instead warned against the practice entirely.
“The current, conventional way to publish proof of reserves is an insecure proof of reserves,” said Saylor.
“It actually dilutes the security of the issuer, the custodians, the exchanges, and the investors.”
I asked @saylor if @MicroStrategy has any plans to publish on-chain proof of reserves
His answer will SHOCK you
“It’s a bad idea.”
– Security Risk
– Irrelevant without also having Big 4-audited liabilitiesCheck it out 👇 pic.twitter.com/tIxUckgbEp
— Mitchell ✝️🇺🇸 (@MitchellHODL) May 27, 2025
Transparency vs. Security
Proof-of-reserves is a system increasingly adopted by crypto exchanges and custodians to show that they hold sufficient assets to match customer deposits. The transparency measure gained popularity following the collapse of FTX in late 2022, which sparked widespread calls for greater accountability across the industry.
Crypto exchanges like Binance, Kraken, OKX, and asset managers like Bitwise have embraced proof-of-reserves reporting to boost user trust.
However, Saylor argued that publishing wallet addresses and other reserve data can expose institutions to significant risk by making their holdings traceable and vulnerable to future attacks.
“No institutional-grade or enterprise security analyst would think it’s a good idea to publish all of the wallet addresses, such that you could be traced back and forth,” he said.
Saylor suggested that anyone curious about the risks of transparency should ask AI to analyze the issue.
“Put it in deep think mode and ask it: ‘What are the security problems of publishing your wallet addresses?’ It would write 50 pages of security problems,” he claimed.
A One-Sided Picture
Saylor also pointed out that proof-of-reserves often paints an incomplete picture, showing what a company holds but not what it owes. This could provide a false sense of security to investors and regulators.
“We’ve learned from FTX and Mt. Gox,” he acknowledged, “but proof-of-reserves isn’t the answer for institutions managing large-scale digital asset holdings.”
Strategy Remains the Top Corporate BTC Holder
Saylor’s firm, Strategy, holds the largest Bitcoin treasury of any publicly listed company, with 576,230 BTC — currently worth over $62.6 billion. The company has been consistently accumulating Bitcoin, with the most recent purchase on May 19 bringing in nearly $765 million in BTC.
Strategy’s commitment to Bitcoin has inspired other publicly traded firms, including Metaplanet, MARA Holdings, and Semler Scientific, to adopt Bitcoin-focused treasury strategies.
Conclusion
While proof-of-reserves may serve a purpose for exchanges and custodians aiming to prove solvency and boost user confidence, Saylor cautions against applying the same model to institutions with massive BTC holdings. His comments reignite a critical debate within the crypto space: how to balance transparency with security in an industry where both are paramount.
