> ## Documentation Index
> Fetch the complete documentation index at: https://docs.core3.io/llms.txt
> Use this file to discover all available pages before exploring further.

# CORE3 for Centralized Exchanges

## How crypto exchanges can prove transparency and reduce perceived risk

Centralized exchanges operate under intense scrutiny from users, institutions, and regulators. After high-profile exchange failures driven by misuse of customer funds, hidden leverage, and inadequate reserve management, the market demands verifiable proof — not declarations.

CORE3's **CEX Probability of Loss (PoL)** framework gives exchanges a structured way to demonstrate their security posture, solvency, and transparency through a standardized, publicly documented methodology represented by unbiased, shared, and data-driven metric that reflects a project's risk exposure on a scale from 0 (Exceptional) to 100 (Critical risk).

## What CORE3 evaluates for exchanges

The CEX PoL methodology is built around three core risk areas, each carrying a fixed weight:

| Category         | Weight | What it covers                                                                                                                           |
| ---------------- | ------ | ---------------------------------------------------------------------------------------------------------------------------------------- |
| **Security**     | 50%    | Infrastructure hardening, user account protection, certifications, bug bounties, penetration tests, and insurance fund coverage          |
| **Solvency**     | 30%    | Proof of reserves audits, wallet ownership verification, audit scope, asset composition, audit frequency, and merkle tree implementation |
| **Transparency** | 20%    | Live reserves wallet tracking, law enforcement cooperation, liabilities snapshots, coverage ratios, and reserves distribution            |

<Info>
  These weights are fixed and publicly disclosed. The scoring is deterministic — no exchange can influence its score through commercial relationships.
</Info>

## How exchanges benefit from CORE3

<AccordionGroup>
  <Accordion icon="handshake" title="Build Verifiable Credibility with Institutional Counterparties">
    Institutional investors and listing teams increasingly require standardized risk signals for crypto exchange evaluation. A strong CEX PoL score, backed by a transparent methodology, gives exchanges a defensible risk profile they can present to partners, regulators, and prospective institutional users.
  </Accordion>

  <Accordion icon="certificate" title="Earn a CORE3 Seal">
    Exchanges that meet predefined thresholds across security (80%+), solvency (80%+), and transparency (wallet submissions for on-chain tracking) qualify for a **CORE3 Seal** — a verifiable trust mark signaling active cooperation with the platform's disclosure requirements.

    <Tip>
      The Seal does not represent endorsement or a guarantee. It signals process participation, transparency, and willingness to operate within a methodology-driven framework.
    </Tip>
  </Accordion>

  <Accordion icon="magnifying-glass" title="Identify and Address Risk Gaps Early">
    The CEX PoL methodology maps specific weaknesses across security, solvency, and transparency. Exchanges can use their PoL assessment to identify gaps before they become incidents, reputational damage, or regulatory triggers.
  </Accordion>

  <Accordion icon="paper-plane" title="Submit Data to Improve Assessment Accuracy">
    CORE3 operates as a self-regulation platform. Exchanges can:

    * Submit additional data or disclosures
    * Provide supplementary evidence beyond standard requirements
    * Submit wallets for on-chain tracking

    Submitted information is processed through automated and manual validation flows, improving the accuracy and completeness of the PoL assessment.
  </Accordion>
</AccordionGroup>

## What CORE3 Does Not Do for Exchanges

<Warning>
  CORE3 does **not** evaluate trading performance, fees, spreads, or market competitiveness. CEX PoL focuses exclusively on **non-market loss vectors** — the risk factors that determine whether users may experience financially material loss unrelated to price movements.
</Warning>

CEX PoL scores are not endorsements. They are structured risk signals backed by verifiable inputs and a publicly documented methodology.

<Card icon="building-columns" href="/cex-pol-methodology" cta="View full methodology" title="CEX PoL Methodology">
  Learn exactly how exchanges are assessed across security, solvency, and transparency
</Card>