Michael Saylor Rejects Onchain Proof-of-Reserves, Citing Security Risks and Institutional Standards
Michael Saylor, co-founder and executive chairman of Strategy (formerly MicroStrategy), is not buying into the growing trend of onchain proof-of-reserves. Speaking at a sideline event during Bitcoin 2025 in Las Vegas, Saylor dismissed the approach as a “bad idea,” citing serious security and transparency concerns for institutional investors.
The push for proof-of-reserves gained traction after the FTX collapse, as firms scrambled to reassure users by making their crypto holdings publicly verifiable via blockchain. But according to Saylor, the current model falls short — and could actually do more harm than good.
“It actually dilutes the security of the issuer, the custodians, the exchanges, and the investors,” Saylor said. “It’s like publishing the addresses and bank accounts of all your kids and thinking that makes your family safer.”
Saylor argued that publicly exposing wallet addresses creates a wide array of security vulnerabilities. Hackers, trolls, and even nation-state actors could trace transactions and target wallets. “Ask any AI to list the risks and you'll get a book,” he said.
For Saylor, the real measure of transparency in a crypto treasury isn’t a blockchain balance — it’s institutional accountability. He emphasized that Strategy relies on Big Four audits, full liability reporting, and U.S. regulatory oversight, with sign-off from the company’s CFO, CEO, and board.
“If you invest in securities, what you want is an institutional-grade proof of assets and proof of liabilities with them netted out. The best practice is not to publish the wallet,” he said.
Proof-of-reserves, he noted, often omits critical financial data such as fiat reserves, debts, and obligations. That, he argued, makes it incomplete at best — and misleading at worst. “Publishing a simple wallet that you can track is really just a crypto parlor trick,” Saylor added. “It’s interesting if you have an exchange. But it’s not real security.”
Saylor left the door open for proof-of-reserves in the future, but only under stringent conditions. He said the concept could be viable if implemented using zero-knowledge proofs — a method that would obscure wallet addresses while still verifying holdings. But even then, it would require buy-in from custodians, auditors, and board members, and it still wouldn’t address liabilities.
Strategy’s stance comes as it continues to double down on its Bitcoin strategy. On Monday, the company announced it had acquired an additional 4,020 BTC for about $427.1 million, paying an average price of $106,237 per coin. That brings Strategy’s total holdings to 580,250 BTC — more than 2.7% of Bitcoin’s total supply. The company’s average purchase price sits at $69,979, giving it an unrealized gain of approximately $23 billion.