Audits and Reports

We offer “Proof of Reserves” audits for cryptocurrency exchanges, cryptocurrency funds, and other custodial services wanting to increase trust placed in them by their customers, regulators, and business partners such as financial institutions.

These audits help test whether or not a company is solvent, having enough customer assets to account for liabilities. They also help determine how susceptible a custodial service is to a security breach, particularly those that could result in the loss of customer funds, whether via a hack, social engineering attack, an internal breach, and a variety of other threat vectors. Thus, improved security measures can be taken to prevent a breach.

In our blog article The Case for Proactive Solvency and Security Audits, we discuss two general approaches that can be taken; a merkle-tree based Proof of Reserves approach, or the trusted third party audit approach (also sometimes referred to as the attestation-based approach). As we describe, both approaches have their pros and cons that are worth carefully considering. CipherBlade helps exchanges with both types of approaches.

As the blockchain industry continues to mature, this level of transparency will be at a minimum a public expectation – and quite possibly a regulatory one.

We have conducted a “Proof of Reserve and Security Audit” for Canadian exchange BitBuy and authored a report which is now featured on the BitBuy homepage.