"Every time a major centralized exchange blows up, a common question that comes up is whether or not we can use cryptographic techniques to solve the problem. Rather than relying solely on "fiat" methods like government licenses, auditors and examining the corporate governance and the backgrounds of the individuals running the exchange, exchanges could create cryptographic proofs that show that the funds they hold on-chain are enough to cover their liabilities to their users. Even more ambitiously, an exchange could build a system where it can't withdraw a depositor's funds at all without their consent. Potentially, we could explore the entire spectrum between the "don't be evil" aspiring-good-guy CEX and the "can't be evil", but for-now inefficient and privacy-leaking, on-chain DEX. This post will get into the history of attempts to move exchanges one or two steps closer to trustlessness, the limitations of these techniques, and some newer and more powerful ideas that rely on ZK-SNARKs and other advanced technologies."