Only 47.3% of Bitcoin on Exchanges Verified Through Proof of Reserves

Less than half of the Bitcoin (BTC) held on exchanges has undergone public Proof of Reserves verification, highlighting a significant gap in transparency within the cryptocurrency industry. According to River, only 47.3% of the approximately 2.4 million BTC held across exchanges has been independently verified through Proof of Reserves. This leaves a substantial amount of BTC, valued at $1.26 million, in the hands of custodians without any proof, raising concerns about fractional reserves and potential hidden insolvency.

Proof of Reserves is a mechanism that allows users to verify that an exchange truly holds the BTC that customers have deposited. Instead of relying on opaque balance sheets, users can confirm on-chain holdings and raw liabilities. This transparency has become increasingly important following the sudden collapse of exchanges like FTX, which underscored the need for greater accountability and trust in the industry.

Several barriers hinder the widespread adoption of Proof of Reserves. Technical complexity is a significant obstacle, as implementing Merkle proofs requires engineering resources that many platforms lack. Additionally, exchanges have privacy concerns, worrying that proofs could reveal user activity or competitive balances. The lack of clear industry regulations also contributes to the low adoption rate, as transparency is not yet mandatory.

River Financial serves as a model for other exchanges by offering monthly Proof of Reserves. For July 1, 2025, River reported 21,314.27 BTC in assets versus 20,971.98 BTC in liabilities, exceeding 100% reserve coverage. Their tool sends a small on-chain transaction to prove wallet ownership and provides a Merkle Sum Tree to let users confirm their inclusion while keeping identities private. River also publicly shares audited financial statements, making it the first U.S. Bitcoin-only exchange to do so. This approach demonstrates how firms can build transparency without compromising user privacy or facing regulatory vacuums.

For users, the benefits of verified custody are clear. It reduces the risk of sudden freezes or losses and builds confidence through visible on-chain proof. As more users demand transparency, there may be increased pressure on other exchanges to follow River’s lead, potentially setting a new industry standard.

To check Proof of Reserves, users should look for on-chain evidence such as small wallet transactions, verify the latest reserve report with the assets versus liabilities ratio, and confirm follow-up public audits or financial statements. By taking these steps, users can better protect their investments and ensure that their funds are securely held by the exchange.