Proof of reserves
Proof of reserves is a procedure in which a custodian such as a crypto exchange shows that the assets it controls cover its clients' balances at a snapshot date. Kraken describes an independent accountant aggregating client balances into a Merkle tree, checking signatures that prove control of on-chain addresses, and comparing the two; clients can check that their balance was included. Luno says such engagements focus on customer liabilities and reserves and complement, not replace, full financial audits.
What the sources say
| Source | Quote | Link |
|---|---|---|
| Kraken: what a Proof of Reserves review is | "A Proof of Reserves (PoR) review is a procedure performed by an independent 3rd party accountant. This is intended to confirm that a custodian holds the assets it claims to on behalf of its clients." | kraken.com |
| Kraken: Merkle tree and comparison | "Lastly, the accountant compares and verifies that these balances exceed or match the client balances represented in the Merkle tree, and therefore that the client assets are in Kraken’s control." | kraken.com |
| Kraken: client self-check | "Any client can independently verify whether their balance was included in the Proof of Reserves procedure by comparing select pieces of data with the Merkle root." | kraken.com |
| Luno: scope of Proof of Reserves engagements | "These engagements are focused on customer liabilities and reserves and are intended to complement, not replace, full financial audits." | guide.luno.com |
Related terms
See also
- Review: revain.org/exchanges/kraken/
- Review: revain.org/exchanges/luno/
- Review: revain.org/exchanges/tokocrypto/
Checked against the sources on 2026-11-01.