Deribit ditches daily proof-of-reserves after moving 90% of client assets to Coinbase

Deribit is killing its daily proof-of-reserves check on Sept. 1, a few months after moving 90% of client assets to Coinbase Custody. The timing is the story.

The chronology

Here's how it unfolded. Deribit announced that 90% of client assets were being held at Coinbase Custody, the big reassuring custody play. Segregated accounts, cold storage, a publicly traded US company holding the keys. It was the kind of move designed to make people stop worrying about exchange failures.

A few months later, the other shoe dropped. Deribit said it will discontinue the daily Proof of Reserves publication starting Sept. 1. The Merkle check that let customers verify their balance was included, and compare aggregate liabilities against wallet holdings, is gone.

The exchange points to the safeguards that remain: VARA-required reserve reporting, reconciliation controls, audited financial materials. Fine. But those aren't public the same way, and that's the catch.

What actually changes

Let's be precise about what clients lose. The daily check was imperfect. It proved inclusion in a Merkle tree, not that the company was solvent. It couldn't catch hidden liabilities or a firm lying about its numbers. FTX had a proof-of-reserves page too, and we all saw how that ended. So there's a fair argument that the daily page was partly marketing.

Color me skeptical, but removing it entirely still feels like a downgrade. The proof-of-reserves page was the one piece of verification a customer could run themselves, without asking permission or waiting for a regulator to publish something. It was trust you could check. Now you're being asked to trust that VARA and the auditors are doing their jobs well, and that nothing important slips through the gaps between reports.

The question worth asking: if the assets are safely at Coinbase, what's the downside of leaving the page up?

Maybe nothing. Maybe this is just cost-cutting and cleanup of a feature that outlived its usefulness. The exchange says the change reflects the new custody structure, and granted, that logic holds up. If 90% of funds are with a US-regulated custodian, the daily wallet check is less meaningful. But the optics are what they're. You move client money to a third party, earn a wave of positive coverage, then retire the public verification.

What to watch next

The first thing I'll watch is whether Deribit voluntarily publishes the VARA or audit findings on its own schedule. The exchange says audited materials remain, but "less public" does a lot of work in that sentence. If quarterly reports land on the site with real numbers, the loss of the daily page stings less. If they don't, clients are essentially flying blind between regulatory filings.

The second thing to watch is everyone else. Deribit is a big name in crypto options, and its custody arrangement was a template others could copy. If daily proof-of-reserves quietly disappears across the industry, that says something about how exchanges feel about public transparency once the regulators are satisfied.

We'll find out soon enough. September is close, and the page goes dark in days. Until then, anyone using Deribit might want to run their own verification, screenshot whatever they can, and think about what "audited materials" actually mean when you can't see them.