After a week which saw FTX, one of the world’s largest crypto exchanges, collapse due to a liquidity crunch, Kraken has reaffirmed that its Proof of Reserve audits have been completed, providing peace of mind to users. Customers can also verify their balance from the audits through their Kraken account.
Read on to find out how Proof of Reserve audits work and why this week’s events may lead users to increasingly look for crypto exchanges that can offer transparent accounting procedures and security protocols.
What Is A Proof Of Reserve Audit?
Proof of Reserve audits use cryptography to verify that an exchange securely holds the assets it says it does, comparing its crypto holdings and account balances.
The transparent and precise infrastructure underpinning cryptocurrencies essentially allows for an accurate, technology-enabled audit to be implemented in a way that traditional financial institutions couldn’t replicate.
Kraken was among the first in the industry to use regular asset audits in 2014. The crypto exchange has since turned to the established accounting firm, Armanino LLP, to complete semi-annual audits, with two Proof of Reserve audits having been conducted in the last 12 months.
Kraken’s most recent audit showed the firm sometimes held more than 100 percent of the necessary balance on its exchange, alongside its on-chain and off-chain staking solutions.
How To Verify Your Balance
Users can verify their balance from the audits directly through their Kraken profile, allowing them to check they are in fact backed by real assets.
To run your own check:
- Log in to your Kraken account
- Follow the three-step process to issue a ‘Record ID’ or ‘Merkle Leaf’ linked to your live account and the audit
- Input the ‘record ID’ on the website of the company’s auditor
This will show whether your cryptocurrencies were indeed held securely by the crypto exchange when the audit was conducted. If you cannot find the Record ID or Merkle Leaf, this means you didn’t hold the assets on Kraken when the audit was completed.
Kraken is a US-based cryptocurrency exchange established in 2013. More than eight million clients from 190 countries turn to Kraken for their crypto investing needs.
Over 185 cryptocurrencies are available and tokens can be purchased in seven fiat currencies, including GBP, EUR, USD, CAD, JPY, CHF and AUD.
But after a tumultuous week, it’s the firm’s security credentials and track record many prospective investors will be interested in. Fortunately, Kraken has said it had no exposure to Alameda Research, the sister firm that FTX lent billions to fund risky trades.
Kraken also stated that it holds around 9000 FTT tokens but had not listed FTX’s native token on any of its spot or futures exchanges.
Ultimately, the crypto exchange has not been materially impacted by the news and events surrounding FTX. This, alongside the firm’s robust security systems, should reassure users that the firm is transparent and trustworthy.
Follow the registration link below to get started with Kraken today.