Proof of reserves, also called proof of solvency, is evidence that Bitso holds the crypto assets it says it holds on behalf of its users. Bitso does this by sharing the list of wallets where it keeps customer funds in custody, known as reserves.

Why proof of reserves alone isn't enough

Most exchanges share a proof of reserves, but on its own, this doesn't guarantee the transparency and trust you deserve. Two problems come up:

• It doesn't prove real ownership and control. Listing wallets with funds doesn't show that the exchange actually holds the keys to move that money.
• It doesn't prove reserves cover obligations. Even if the exchange controls the wallets it lists, if the reserves are smaller than what it owes customers, it can't let everyone withdraw their full balance at the same time.

Bitso solves both problems by signing messages directly on the blockchain, proving it holds the private keys to the addresses it lists as reserves.

To protect sensitive information, like wallet addresses, Bitso applies a cryptographic protocol called zk-SNARK. This lets Bitso prove it holds the required keys and reserves without revealing the wallet addresses.

This information is for illustrative purposes only and is not financial advice. Buying, selling, trading, or using crypto assets carries risk, including price volatility and potential loss of capital. Read the full risk warning for more information.