Kraken Launches Proof of Reserves Audit For Independent Verification of BTC and ETH Balances

Popular cryptocurrency exchange Kraken announced Thursday that it has launched a Proof of Reserves auditing service to enable users to independently verify if their bitcoin (BTC) and ether (ETH) balances are backed by actual assets.

“At Kraken, your security and safety are our top priority, and our regular Proof of Reserves audits will ensure we are meeting and exceeding expectations for accountability and transparency,” the exchange said.

Proof of Reserves is a cryptographic accounting procedure carried out with the help of a third-party auditor to confirm the amount of digital assets a custodian claims it holds on behalf of its client.

Kraken said the latest audit, which was concluded with the help of accounting and consulting firm Armanino LLP on December 31, confirmed that it holds all BTC and ETH it claims to on behalf of its clients, including those held on its “industry-leading on-chain and off-chain staking services.”

With help from Armanino LLP, the exchange noted that it will conduct a public Proof of Reserves audit every six months.

So far, the audit only covers two out of the more than 100 digital assets traded on Kraken; the exchange said it is looking to increase that number in the near future.

Meanwhile, Kraken has quickly become one of the leading staking providers in the crypto industry. In 2021 it saw its staking business grow by 950% to reach almost $16 billion.

In December, the crypto exchange announced the acquisition of a non-custodial staking platform called Staked in a bid to complement its existing staking services and allow clients to keep possession of their staked cryptocurrency.

The acquisition was the fifth by the exchange last year, which Kraken described as one of the biggest in the industry. However, the financial details of the purchase were not disclosed.

The exchange is also looking to expand its product offerings with plans to launch a custodial non-fungible token (NFT) marketplace later this year.