Short Privacy-Preserving Proofs of Liabilities

In the wake of fraud scandals involving decentralized exchanges and the significant financial loss suffered by individuals, regulators are pressed to put mechanisms in place that enforce customer protections and capital requirements in decentralized ecosystems. Proof of liabilities (PoL) is such a mechanism: it allows a prover (e.g., an exchange) to prove its liability to a verifier (i.e., a customer).