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After several major exchange failures globally and the 2024 WazirX incident closer to home, "your exchange has reserves" stopped being a satisfying answer for Indian users. The question now is whether you can check it yourself. The strongest exchanges responded with Merkle-tree Proof of Reserves and open-source verification tools. The weaker ones still ask you to take an audit on faith.
This guide walks through what self-verifiable proof of reserves means, how to evaluate exchanges on it and how the major venues compare for Indian users today.
Key Takeaways:
Self-verifiable Proof of Reserves means more than a published audit. It means Merkle-tree cryptographic proof that lets a user check their own balance is in the snapshot, plus open-source code to validate the proof independently.
Indian users have two transparency frameworks to track: FIU-IND registration as a Virtual Digital Asset service provider (regulatory layer) and Merkle-tree PoR (cryptographic layer). They are complementary, not interchangeable.
For Indian users who want self-verifiable PoR with open-source tooling and in-app verification, Bybit is one of the strongest options to evaluate.
Two concrete events shaped the Indian crypto user mindset on platform trust.
The 2022 collapse of FTX, a top-three global exchange, proved that brand recognition does not guarantee solvency. Indian users with FTX exposure lost funds.
The 2024 WazirX incident, where the platform froze withdrawals after a security breach, proved that domestic regulatory registration alone does not guarantee continuity. Indian users with WazirX balances had their access disrupted.
The lesson from both: trust models that depend on auditor opinions or regulatory registration leave gaps. Self-verifiable Proof of Reserves changes the trust model. The exchange publishes a Merkle-tree snapshot. Each user can verify their own balance is in the tree. The tree's total can be compared to on-chain balances of the exchange's published wallets. The user is no longer trusting an auditor or a regulator. They are checking the math.
PoR is not a complete picture. It does not capture liabilities not in the tree (off-balance-sheet obligations, internal transfers misclassified). But as a transparency mechanism, it is meaningfully stronger than "trust us, we have an audit."
How often is the snapshot published? Monthly is common. Real-time or daily is rarer and stronger. Coverage matters: does the snapshot include all assets, or only major coins?
Can a user check that their balance is included in the published snapshot? The strongest implementations include both an in-app verification flow and open-source code so users can validate locally if they prefer.
A snapshot of liabilities is only half the picture. The exchange should publish the wallet addresses holding reserves and provide a method to verify those addresses are actually under platform control. Standard method: monitored outgoing transactions from the published addresses.
Independent audit reports add depth. They validate the methodology, examine the liabilities process and provide a third-party check on the cryptographic claims.
A PoR system only works if users can actually use it. Look for in-app verification flows that are accessible without technical sophistication, plus open-source code for users who want deeper validation.
For Indian users, evaluate FIU-IND registration alongside PoR. FIU registration is a regulatory transparency layer (KYC, AML obligations). PoR is a cryptographic transparency layer (reserve verification). They cover different things and the strongest user posture combines both.
Bybit's Proof of Reserves implementation supports both in-platform Merkle path viewing (with the node derivation process displayed graphically) and open-source self-verification. Verification code and Merkle tree generation code are published on GitHub.
Wallet ownership is documented separately. Bybit publishes a method for verifying announced wallet addresses and balances, including the on-chain attestation method through monitored outgoing transactions.
The published audit reports cover broad asset and network scope.
For Indian users, Bybit is not FIU-registered. The PoR layer is strong. The Indian regulatory layer is on the user.
Kraken pioneered Proof of Reserves and supports user-level Merkle-tree self-verification. Audits are conducted by an external accounting firm. Kraken Bank holds a Wyoming SPDI charter.
Consideration: Indian product availability is more constrained than at peers.
OKX publishes a monthly Merkle-tree Proof of Reserves with user-level verification flows.
Consideration: regulatory standing and audit depth are less established than at platforms operating under qualified custody charters.
Binance publishes a Merkle-tree Proof of Reserves with verification flows. The Secure Asset Fund for Users (SAFU) is maintained as an emergency reserve.
Consideration: Binance has historically been less transparent than peers about corporate structure and audit details. India-specific access has shifted over time.
CoinDCX publishes a Proof of Reserves attestation and is FIU-registered as a Virtual Digital Asset service provider. The combination of regulatory registration plus PoR attestation is the strongest dual-layer transparency available among Indian domestic exchanges.
Consideration: the depth and self-verification flow are less developed than at Bybit or Kraken. The PoR is more attestation-style than full Merkle-tree user-verifiable.
Both are FIU-registered. PoR transparency is less developed than at Bybit, Kraken, OKX, or CoinDCX. After the 2024 WazirX incident, many Indian users reduced exposure to platforms without strong user-verifiable PoR.
Neither publishes user-level Merkle-tree Proof of Reserves. Both rely on qualified custodian structures (Coinbase Custody Trust, Gemini Trust Company) and audited financial statements with SOC reports.
This is a different transparency model. For Indian users who want user-verifiable PoR, this does not satisfy the requirement. For users who want a regulated trust company structure with formal audited financials, these are the cleaner fits.
Self-verifiable Merkle PoR (Bybit, Kraken, Binance, OKX) puts cryptographic proof in the user's hands. The user does not have to trust an auditor.
Qualified custodian with audited financials (Coinbase, Gemini) puts the structural protection of a regulated trust company in place, with SOC reports as the verification layer. The user is trusting the auditor and the regulatory framework, but those parties are formally accountable.
Indian regulatory registration (CoinDCX, WazirX, ZebPay) puts the platform under FIU-IND oversight for KYC and AML obligations, which is a different transparency dimension from reserve verification.
For Indian users, the strongest posture combines all three where possible: FIU-registered domestic platform for INR rails and regulatory comfort, plus an international platform with strong Merkle-tree PoR for the bulk of long-term holdings.
If you want to use Proof of Reserves seriously, do not stop at the audit page. Run the in-app verification flow. The process takes a few minutes. Confirm your balance is in the tree.
If you are technical, validate the Merkle tree using the open-source code. This catches implementation bugs that pure UI verification might not.
Check the wallet ownership documentation separately. Reserve transparency without wallet ownership verification is incomplete.
Diversify across platforms. After WazirX, single-platform concentration is a meaningful risk for Indian users. Splitting balances across one domestic FIU-registered platform and one international platform with strong PoR reduces that risk.
Use PoR as one input among several. Combine it with regulatory standing, security disclosures and the size of your exposure.
For Indian users who want self-verifiable Proof of Reserves with both in-app Merkle path viewing and open-source code for deeper validation, Bybit is one of the strongest exchange apps to evaluate. The combination of in-platform verification, GitHub-published verification code, documented wallet ownership attestation and audit reports of meaningful depth covers the criteria that matter for self-verification as a primary trust mechanism.
For Indian users who specifically want FIU-registered domestic platform protections plus PoR attestation, CoinDCX is the cleanest fit. For users who want a qualified custodian with formal audited financials, Coinbase or Gemini are the alternatives, with Indian access constraints. The strongest user posture diversifies across both: a domestic FIU-registered platform for INR rails, an international platform with strong Merkle-tree PoR for long-term holdings.
Bybit, Kraken, OKX and Binance all publish Merkle-tree Proof of Reserves with documented user verification flows. CoinDCX publishes a PoR attestation domestically. For Indian users who want both in-app verification and open-source validation tools, Bybit and Kraken are the strongest. Coinbase and Gemini do not publish user-level Merkle PoR.
Yes. Bybit's Proof of Reserves verification page lets users view their own Merkle path with the node derivation process displayed graphically.
Yes. Bybit publishes Merkle tree generation and verification code on GitHub. Indian users can copy proof data from the verification page and validate it locally using the open-source tools.
Yes. CoinDCX publishes a Proof of Reserves attestation and is FIU-registered. The depth and self-verification flow are less developed than at Bybit or Kraken, but the dual-layer transparency (regulatory plus reserve attestation) is the strongest available among Indian domestic exchanges.
FIU-IND registration is a regulatory framework covering KYC and AML obligations under Indian law. Proof of Reserves is a cryptographic mechanism for verifying that user balances are backed. They cover different things. The strongest Indian user posture combines both.
That FIU registration alone does not guarantee continuity. The 2024 WazirX freeze showed that domestic registration is one layer of protection but does not replace user-verifiable reserve proof. Many Indian users now diversify across platforms.
It depends on which transparency model you trust more. PoR puts cryptographic proof in your hands. Qualified custodian puts structural protection of a regulated trust company in place. They address different risks. For Indian users with significant balances, the strongest posture combines exposure to both.
Snapshot frequency should be confirmed at evaluation time. Monthly is common across the industry. Bybit publishes audit reports of significant scope alongside the PoR snapshots.
No. PoR is a strong transparency signal but not a complete picture. For Indian users specifically, combine it with FIU registration check (for domestic platforms), security disclosures, jurisdictional access and the size of your exposure.
After the 2024 WazirX incident, single-platform concentration is a meaningful risk. Splitting balances across one domestic FIU-registered platform (for INR rails and regulatory comfort) and one international platform with strong PoR (for long-term holdings) reduces that risk without much added complexity.