# Proof of reserves

A custodian's snapshot check (Kraken's uses a Merkle tree) that its on-chain holdings cover client balances; not a full audit.

Canonical: https://achivx.org/glossary/proof-of-reserves/
Updated: 2026-11-01

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](https://www.kraken.com/proof-of-reserves) |
| 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](https://www.kraken.com/proof-of-reserves) |
| 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](https://www.kraken.com/proof-of-reserves) |
| 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](https://guide.luno.com/hc/en-gb/articles/14371776098845-A-guide-to-Luno-s-Proof-of-Reserves) |

## Related terms

- [Reserve attestation](/glossary/reserve-attestation/)
- [Reserve / reserve assets](/glossary/reserve-assets/)

## See also

- Review: [revain.org/exchanges/kraken/](https://revain.org/exchanges/kraken/)
- Review: [revain.org/exchanges/luno/](https://revain.org/exchanges/luno/)
- Review: [revain.org/exchanges/tokocrypto/](https://revain.org/exchanges/tokocrypto/)

Checked against the sources on 2026-11-01.

## revain.org
- https://revain.org/exchanges/kraken/
- https://revain.org/exchanges/luno/
- https://revain.org/exchanges/tokocrypto/

## Sources
- https://www.kraken.com/proof-of-reserves
- https://guide.luno.com/hc/en-gb/articles/14371776098845-A-guide-to-Luno-s-Proof-of-Reserves