Kraken Verifies $21.5 Billion in Client Assets with Latest Proof of Reserves

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.

2024 Proof of Reserves has been completed by @krakenfx Our latest Proof of Reserves covered the most widely held cryptocurrencies on the platform. It included the spot positions, open margin positions, futures balances and on-chain staked amounts of eligible assets. In total,…

— Nick Percoco (@c7five) November 4, 2024

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.

This article was written by Tareq Sikder at www.financemagnates.com.