I don't think it is really possible to do a proof of reserves because it is very easy to rehypothecate the tokens. For example coinbase can prove they they own X amount of BTC, but they can't prove how much Bitcoin they owe. They can prove the assets but not the liabilities.

Say Microstrategy demands coinbase prove they have their money.
Coinbase can point to a wallet with 10000 BTC in it and claim it's MSTR BTC.
They can then go to Blackrock and tell them the same wallet is their BTC.
The only way to avoid this is to make ALL the data public which a lot of these institutions don't want.
Not even for nefarious purposes, just for security.

I think eventually the tech should get good enough that most of these institutions will be able to setup their own wallets or setup multisig with partnered institutions to make sure BTC can't be rehypothecated. I assume this is how a lot of it works already and they again just don't explain how it works exactly for security reasons.