I think this is the right step forward and enjoy seeing CEXs self regulate in order to gain favor with consumers.
However, other liabilities related to the operating business are not included here (e.g loans from traditional finance or PE/VC forms). This could be overcome if the CEX sets up it's organization to only give seniority and secured debtor positions to each depositor to ensure that, in the event of a bankruptcy, the depositors would get their money out first.
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Here's the Tweet that kicked off the latest Twitter thread where BitMEX shared this blog post:
[1/9] BitMEX’s New Privacy Preserving Proof Of Liability System Explained
Under the classic 2014 Maxwell scheme, liabilities can be arranged into a Merkle tree, with individual user account hashes as leaves. User balances are also provided in the tree & sum up to the total
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