Kraken Launches Proof of Reserves Audits Allowing Clients to Verify Crypto Balances
The company successfully passes a cryptographic audit conducted by Armanino LLP, showcasing how it is exceeding the transparency offered by legacy financial firms.
CHEYENNE, Wyo. - February 3, 2022 - Kraken, one of the world’s largest digital asset exchanges, is announcing its implementation of next-generation auditing standards designed to let clients prove their bitcoin and ether balances are backed by real assets held in our custody.
Administered by Armanino LLP, the Proof of Reserves audit is the second of its kind conducted on our exchange since 2014, and it affirms that more than $19 billion worth of client bitcoin and ether is safely – and provably – on our platform. This includes the $3.5 billion worth of ether held in Kraken’s secure on-chain staking service, the industry’s leading ETH2 validator.
Though the audit covers just two of the over 100 assets available for trading on our exchange, it adheres to, and seeks to advance, recommended standards for new cryptographic audits that we hope will become widely embraced in the digital asset sector.
In the 13 years since the invention of Bitcoin, it’s estimated that more than $23 billion in digital assets have been lost to hacks and insolvencies. Through our commitment to continuing Proof of Reserves audits, we believe Kraken can mitigate critical risks to client funds.
“Security and transparency for our customers has been at the core of our culture as a company, and the core of our practices and operations from the very beginning,” said Jeremy Welch, Chief Product Officer at Kraken. “Regular Proof of Reserves audits will demonstrate that, for Kraken, our client security and safety are a top priority.”
With the announcement, Armanino has agreed to perform Proof of Reserves audits for Kraken semi-annually, following the attest standards used by the American Institute for Certified Public Accountants, a regularity intended to ensure Kraken meets rigorous standards for accountability.
“We offer Proof of Reserves because we're passionate about this industry, and believe it is the future of finance and capital markets,” said Noah Buxton, blockchain practice lead at Armanino. “With this audit, we’re taking historical best practices from certified public accounting firms and applying them in a new way that’s incredibly exciting.”
This regular transparency is designed to minimize trade-offs for client data privacy. Kraken will provide Armanino only anonymized balance information, meaning no sensitive client data is exchanged. (A technical overview of the audit process, explaining how it leverages the transparency of public blockchains, can be found on our website.)
Clients, too, can now verify their bitcoin and ether balances on our exchange at the time of the audit, with a simple three-step process accessible in their accounts. The verification will reflect account balances at the time of the audit, but will not include any subsequent trades or deposits.
Kraken is the world’s largest global digital asset platform based on euro volume and liquidity. Globally, Kraken’s client base trades more than 90 digital assets and 7 different fiat currencies, including GBP, EUR, USD, CAD, JPY, CHF and AUD.
Kraken, now 2300+ employees, was founded in 2011 and was one of the first exchanges to offer spot trading with margin, parachain auctions, staking, regulated derivatives and index services. Kraken is trusted by over 8.5 million traders and institutions around the world and offers professional, round-the-clock online support.
Kraken is backed by investors including Tribe Capital, SkyBridge, Hummingbird Ventures, Blockchain Capital, Digital Currency Group, among others.
Kraken markets can be monitored and traded through the Kraken iOS and Android apps, and through the Cryptowatch iOS, Android and Desktop apps.
For more information about Kraken, please visit www.kraken.com
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