Kraken Says Proof-of-Reserves Audit Shows $19B in Bitcoin and Ether

Crypto firms are racing to build credibility as the industry spotlight turns to proving reserves.

AccessTimeIconFeb 3, 2022 at 2:31 p.m. UTC
Updated Feb 4, 2022 at 7:12 p.m. UTC

Danny is CoinDesk's deputy business editor. He owns BTC, ETH and SOL.

Kraken on Thursday announced the results of a proof-of-reserves audit showing the crypto exchange held $19 billion in bitcoin and ether. Other crypto assets were not included in the audit.

Accounting firm Armanino completed the independent audit on Dec. 31, 2021, a Kraken representative told CoinDesk. A culmination of “years” of work, said Chief Product Officer Jeremy Welch, that required reconstructing a merkle tree to prove every coin was proper.

The audit’s release comes as crypto firms race to burnish their credibility amid mounting scrutiny from regulators and traders. Kraken itself has made no secret of its plans to go public, making brand perception all the more important.

It also sends a message to the entire industry, Welch argued.

“We do hope that all companies in this space continue to take the kind of transparent and secure approach that we know is possible,” he said in an interview. “That's the unique thing about this industry, right? It's not even possible in the older financial system to do something like this.”

Welch said Armanino will be posting a copy of the audit to its website.

Kraken intends to commission public proof-of-reserve audits periodically: perhaps once a year or quarter, Welch said. It last released the results of such an audit in 2014.

Customer data is kept private in the audit, Welch said. He further noted customers can check their accounts against the results of the audit using a website tool.

Future audits could see more coins included. This one stuck to the top two cryptos for technical reasons because Welch said that’s where most of Kraken customer crypto rests.

UPDATE (2/3/2022; 11:55am EST): This article has been updated to clarify the nature of Kraken's bitcoin holdings in 2014.

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Danny is CoinDesk's deputy business editor. He owns BTC, ETH and SOL.

CoinDesk - Unknown

Danny is CoinDesk's deputy business editor. He owns BTC, ETH and SOL.