Proof of Reserves

A custodian can demonstrate address control and publish a Merkle root of balances. Each customer can verify inclusion with a membership proof. One customer’s inclusion cannot reveal all omitted accounts or debts.

Assessment requires the measurement date, covered assets, considered liabilities and verification method. Temporarily borrowed assets, third-party liens and off-chain obligations can change the interpretation.

A cryptographic reserve proof differs from a complete financial audit. It provides transparency for bounded claims rather than automatically certifying the ability to satisfy every creditor.