Saylor’s Bombshell: Proof-of-Reserves Is a ’Trojan Horse’ for Crypto Risk

MicroStrategy’s bitcoin evangelist drops a truth bomb—audits won’t save you from systemic collapse.

Why transparency theater might be crypto’s next reckoning.

Bonus jab: Wall Street still can’t tell the difference between a Merkle tree and an oak tree.

TLDR

• Strategy confirmed it will not implement onchain proof-of-reserves due to security concerns.
• Michael Saylor stated that publishing wallet addresses increases risks from hackers and malicious actors.
• The company emphasized that proof-of-reserves often fails to show liabilities or full financial health.
• Strategy supports audits by Big Four firms as a more reliable method for financial transparency.
• Saylor mentioned that zero-knowledge proofs could be considered only if they meet strict security standards.

During an event ahead of Bitcoin 2025 in Las Vegas, Strategy confirmed it would not adopt onchain proof-of-reserves. Michael Saylor, co-founder and executive chairman, cited serious security risks as the reason. The firm emphasized that publishing wallet addresses could expose users and institutions to cyberattacks and data breaches.

Strategy pointed out that hackers and malicious actors often target visible onchain wallets. Saylor warned that transparency at the cost of security does not align with institutional-grade risk management. He stated that disclosing wallet details publicly invites unwanted tracking and opens dangerous vectors for exploitation.

The company believes institutional investors prefer secure, audited disclosures instead of traceable public wallets. For this reason, Strategy considers formal audits and regulatory compliance more effective than onchain displays. The firm sees itself as a treasury-grade operation with different responsibilities than retail exchanges.

Proof-of-Reserves Falls Short, Says Strategy

Saylor stressed that onchain proof-of-reserves omits liabilities, which are critical for a full financial picture. Strategy maintains that reliable audits from Big Four firms provide a more accurate view of financial health. According to the company, publishing assets alone fails to meet public market standards.

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 liabilities

Check it out 👇 pic.twitter.com/tIxUckgbEp

— Mitchell ✝️🇺🇸 (@MitchellHODL) May 27, 2025

While some crypto platforms embraced onchain proofs after the FTX collapse, Strategy views the trend as insufficient. The firm believes wallet snapshots lack legal accountability and do not ensure solvency or transparency regarding obligations. Therefore, it relies on audits reviewed by executives and boards subject to U.S. law.

Strategy insists that institutional security protocols do not support making wallet addresses public. The company considers it irresponsible to reveal addresses tied to large holdings without protection. Instead, Strategy aligns its reporting with GAAP standards, using 10Ks and 10Qs for investor assurance.

Strategy Rules out Proof-of-Reserves Plans

Michael Saylor said Strategy may explore zero-knowledge proofs if security conditions and privacy standards are fully met. However, any such method WOULD require approval from auditors, custodians, and board members. Currently, the company believes no available solution satisfies all enterprise security requirements.

Though Saylor acknowledged the innovation behind zero-knowledge technology, he emphasized it still overlooks liabilities. Strategy remains firm that asset proof alone is inadequate without obligations and corporate oversight. Therefore, the firm does not consider proof-of-reserves a practical tool at scale.

Strategy’s focus remains on long-term bitcoin accumulation with a secure and compliant framework. On Monday, the company announced the purchase of 4,020 more bitcoins for approximately $427.1 million. With 580,250 BTC in its holdings, Strategy continues reinforcing its bitcoin-led treasury approach.