crypto markets
After 2022 every large venue started publishing proof of reserves. The phrase covers a wide range of things, from an independently attested report to a screenshot of a wallet balance, and the difference is the entire point.
What a complete attestation contains
01
Assets
Wallet balances at a fixed timestamp, provable through signed messages from the addresses.
02
Liabilities
Total customer balances, committed in a Merkle tree so each customer can verify their own leaf without seeing anyone else.
03
Independence
An outside firm attesting that assets cover liabilities, on a stated date, under a stated scope.
Kraken publishes a quarterly Merkle-tree proof of reserves with an independent accountancy attestation and an open-source verification tool, with the December 2025 report attested as of 31 December 2025 and covering spot, margin, futures and staked balances across several assets. Binance publishes a self-reported Merkle and zk-SNARK verification page with no third-party auditor named on it. Coinbase publishes a proof of reserves for cbBTC specifically; an exchange-wide attestation is not something we could verify.
The four limits nobody removes
- 01It is a snapshot. Assets can move the next day.
- 02Borrowed assets can inflate a snapshot unless the scope explicitly excludes them.
- 03Off-chain liabilities such as loans and legal claims are usually out of scope.
- 04Verification is per user. Nobody can confirm the complete liability set from outside.
Proof of reserves is evidence about one moment. Custody is about every other moment.
Written by Aram Latifi. Ex-quant developer, now writing about the plumbing of retail trading. No affiliate links on this site.
