Proof of Reserves with Merkle Trees and Zero-Knowledge Solvency Checks

Summary

The announcement describes an exchange plan to expand its Proof of Reserves reporting with full liability-tree disclosure and zero-knowledge proofs. It explains the existing Merkle-tree approach: customers can check that their balances appear in the reported liability set, and the aggregate customer balance can be compared with publicly visible on-chain wallet balances. The proposed zero-knowledge component is described as a way to verify that client liabilities are covered without exposing private customer information.

The document also says the exchange planned monthly reserve publications and provides a snapshot of reported holdings at the time of the announcement. These statements illustrate how reserve assets and customer liabilities can be presented for public scrutiny, but the announcement is not an independent audit or a full assessment of solvency. It gives no implementation details for the proposed proofs and does not address obligations or risks outside the stated reserve comparison. Its claims about asset quality are attributed to a third-party analytics firm.

Key ideas

• A Merkle tree can let customers verify that their balances are included in reported exchange liabilities.
• Comparing aggregate customer balances with public on-chain wallets is presented as a reserve coverage check.
• The announced zero-knowledge upgrade was intended to verify solvency while protecting customer privacy.
• The document describes planned disclosure upgrades and reporting practices, not a completed independent audit.
• The reserve comparison described does not assess every obligation or source of exchange risk.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.