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What Is ‘Proof-of-Reserves’ and How Does It Relate to Exchange Solvency?

Proof-of-Reserves (PoR) is an independent audit that verifies an exchange holds the full amount of assets it claims to hold on behalf of its customers. While it primarily verifies the custodial side, it indirectly relates to solvency by confirming the exchange has the necessary collateral to back customer funds, which is foundational to its financial health.

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