China's OKCoin passes audit with 104.86% of customer BTC in reserve

Chinese bitcoin exchange OKCoin have announced the results of their recent audit, revealing that the exchange holds 104% of the BTC needed to all cover customer deposits. The audit was conducted over four days by Ripple Labs CTO Stefan Thomas, who performed similar audits for Kraken and BitFinex earlier this year. OKCoin announced the results yesterday on a post on popular Chinese microblogging site Weibo.

Holding 104% of customer funds in reserve demonstrates that OKCoin is not running a fractional reserve system, making it decidedly more solvent than most banks. In the U.S., for instance, a bank with less than $79.5 million in total deposits is required to only hold 3% of actual funds. Although not a fair comparison in many ways, given the credit-based U.S. and global banking structure, the OKCoin audit should ease many customer nerves in the still-looming shadow of the Mt.Gox debacle.

Speaking with CoinDesk about the audit, OKCoin CEO Star Xu said that the exchange was working on a method for near-instant “merkle tree” auditing, allowing users to confirm the liquidity of their accounts and the total reserves of the exchange. “We have always sought to provide our customers with confidence in OKCoin’s security and world-class technology architecture,” Xu said. “Whilst many bitcoin businesses have talked about being transparent, only a handful have taken the necessary steps.”

The remaining two of China’s “big three” exchanges, BTC China and Huobi, have announced plans to release their own audit details in coming months.