In a bold move reinforcing trust and transparency in the digital asset industry, Kraken has unveiled its Proof of Reserves (PoR) audit service, enabling customers to verify that their Bitcoin and Ethereum holdings are fully backed by real, secure assets. Conducted by Armanino LLP—one of the largest accounting firms in the U.S.—this independent audit marks a significant milestone in Kraken’s ongoing commitment to security, accountability, and customer empowerment.
A New Standard for Exchange Transparency
Proof of Reserves is more than just an audit—it's a powerful demonstration of financial integrity. For the first time since 2014, Kraken has undergone a comprehensive PoR audit covering over $19 billion worth of customer-held Bitcoin and Ethereum, including $3.5 billion in Ethereum secured through Kraken’s industry-leading staking services.
While the audit currently applies only to two of the 100+ assets traded on Kraken, it aligns with emerging best practices recommended by the Digital Chamber of Commerce, setting a precedent for broader adoption across the crypto ecosystem. The goal? To establish a new norm where users can independently confirm that exchanges hold sufficient reserves to back customer balances—no blind trust required.
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Why Proof of Reserves Matters Now More Than Ever
Since Bitcoin’s inception 13 years ago, over $23 billion in digital assets have been lost due to exchange hacks, fraud, and insolvencies. These incidents have shaken user confidence and highlighted a critical gap: the lack of regular, verifiable audits in the crypto space.
Kraken’s initiative directly addresses this vulnerability. By committing to biannual Proof of Reserves audits verified under American Institute of Certified Public Accountants (AICPA) standards, Kraken ensures ongoing accountability. This frequency exceeds typical financial reporting cycles and reflects the urgency of maintaining trust in a fast-moving digital economy.
“Customer safety and transparency have always been at the core of our culture,” said Jeremy Welch, Chief Product Officer at Kraken. “Regular Proof of Reserves audits prove that protecting user funds isn’t just a promise—it’s a measurable practice embedded in our operations.”
How the Audit Works: Security Without Sacrificing Privacy
One of the biggest concerns with financial audits is data privacy. Kraken has designed its PoR process to protect sensitive user information while still enabling full verification.
Armanino receives only anonymized balance data from Kraken—no personal identifiers are shared. Using cryptographic proofs and public blockchain data, auditors confirm that total customer balances are fully covered by on-chain assets held in Kraken’s wallets.
Customers can also participate directly. During audit periods, users can verify their own Bitcoin and Ethereum balances in three simple steps via their accounts. While these snapshots reflect balances at a specific point in time (excluding subsequent transactions), they empower individuals to independently cross-check the exchange’s claims.
This blend of institutional-grade auditing and user-level verification creates a dual-layer trust model—rare in traditional finance but essential in decentralized ecosystems.
The Role of Independent Auditors in Building Trust
Armanino LLP brings decades of auditing expertise to the blockchain space. With its dedicated blockchain practice led by Noah Buxton, the firm is applying time-tested accounting principles to innovative technologies.
“We’re passionate about this industry because we believe it represents the future of finance and capital markets,” Buxton said. “With Proof of Reserves, we’re taking proven public accounting practices and applying them in an exciting, new way.”
By adhering to AICPA verification standards, Armanino ensures that Kraken’s audit meets rigorous professional benchmarks. This third-party validation adds credibility and helps distinguish responsible platforms from those operating opaquely.
Empowering Users to Verify for Themselves
Transparency isn’t just about publishing reports—it’s about enabling action. Kraken invites all customers to review the technical details of the audit process on its website and even contribute feedback to help improve future iterations.
The ability for users to self-verify their holdings strengthens collective oversight. When millions of users can act as watchdogs, the entire ecosystem becomes more resilient against mismanagement or malpractice.
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Frequently Asked Questions (FAQ)
What is Proof of Reserves?
Proof of Reserves is an independent audit that verifies an exchange holds enough cryptocurrency to fully cover customer balances. It uses cryptographic proofs and blockchain data to provide transparent, tamper-proof evidence.
Which assets are covered in Kraken’s audit?
Currently, the audit covers Bitcoin (BTC) and Ethereum (ETH), representing over $19 billion in customer funds. Kraken aims to expand coverage to more assets in future audits.
How often will Kraken conduct these audits?
Kraken has committed to biannual Proof of Reserves audits conducted by Armanino LLP, ensuring consistent and frequent validation of asset backing.
Can I verify my own balance?
Yes. During audit periods, customers can log into their accounts and follow a three-step process to cryptographically verify their BTC and ETH balances are included in the reserve proof.
Does this mean my funds are 100% safe?
While no system is entirely risk-free, regular PoR audits significantly reduce the risk of loss due to insolvency or fraud. Combined with Kraken’s strong security protocols, this provides one of the highest levels of protection available.
Why doesn’t the audit cover all 100+ assets?
Bitcoin and Ethereum were chosen first due to their high market value and transparent blockchains, which make verification more straightforward. Expanding to other assets requires additional technical solutions still under development.
Leading by Example in a Maturing Industry
Founded in 2011, Kraken is one of the longest-standing digital asset exchanges globally. With over 8 million traders and institutions relying on its platform, Kraken supports trading across 100+ cryptocurrencies and seven fiat currencies, including USD, EUR, GBP, JPY, and CHF.
Beyond spot trading, Kraken offers advanced features like margin trading, staking, regulated derivatives, parachain auctions, and index products—all backed by 24/7 customer support and robust compliance frameworks.
Backed by prominent investors such as Tribe Capital, SkyBridge, Hummingbird Ventures, Blockchain Capital, and Digital Currency Group, Kraken continues to innovate while prioritizing security and user trust.
Available via iOS, Android, and desktop apps—including integration with Cryptowatch—Kraken provides seamless access to real-time markets and powerful trading tools.
Final Thoughts: Raising the Bar for Crypto Accountability
Kraken’s launch of a recurring, independently verified Proof of Reserves service sets a new benchmark for accountability in digital finance. In an industry where trust is both fragile and foundational, initiatives like this are not just welcome—they’re necessary.
By combining institutional rigor with user empowerment, Kraken demonstrates that transparency doesn’t have to come at the cost of privacy or performance. As regulatory scrutiny increases and institutional adoption grows, such proactive measures will likely become standard—not optional.
For users, the message is clear: your funds deserve more than promises. They deserve proof.
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