Kraken recently completed its latest Proof of Reserves, providing clients with a way to verify that their account balances are fully backed by on-chain assets.

This verification process, performed by an independent third-party accounting firm, is based on a snapshot taken on September 30, 2024. The attestation is intended to demonstrate that Kraken securely holds client assets for supported cryptocurrencies .

Kraken Attests $21.5 Billion Assets

This latest Proof of Reserves attestation covered six widely held assets on Kraken’s platform: Bitcoin , Ethereum, Solana, USD Coin, Tether, and XRP. The assessment included clients’ spot and margin positions, futures balances, and on-chain staked amounts of eligible assets, specifically ETH and SOL.

In total, the attestation accounted for over $21.5 billion in client assets. Kraken made these results available on November 1, 2024.

Kraken introduced the Proof of Reserves system in 2014 and has committed to regular attestations since January 2022. The process is designed to reassure clients that Kraken’s holdings are fully reserved with in-kind assets.

Clients who held any of the supported assets as of the snapshot date can personally verify their balances are backed by logging into their Kraken Pro accounts.

Merkle Tree Ensures Verification

To conduct the Proof of Reserves, Kraken sums all client liabilities and provides a method for clients to verify that their account and balance details were included in this total. A third party then attests to Kraken’s control over on-chain assets in amounts that exceed these liabilities.

The process uses a Merkle Tree to represent individual account balances through encrypted, unique hashes. These hashes are combined into a single Merkle root hash that represents the total client balances covered.

This approach allows for verification without exposing unencrypted data. Kraken again engaged The Network Firm, a registered CPA firm specializing in cryptocurrency attestation, to confirm it has control over the wallets holding these client balances.

“As with our previous Proof of Reserves, clients can now download the full path within the Merkle Tree, from their account to the root. They can review its construction, gain a better understanding of how Kraken’s Proof of Reserves process works and personally verify the value and validity of the root hash included in the report,” Kraken stated.