Deribit Ends Daily Proof of Reserves After Coinbase Custody Shift
Crypto derivatives exchange Deribit will stop publishing its daily Proof of Reserves on September 1, retiring a system that allowed customers to independently verify their inclusion in the exchange's liabilities and compare those liabilities with disclosed onchain assets.
Summary:
- Deribit will discontinue its public daily Proof of Reserves publication from September 1.
- The change follows a custody overhaul in which roughly 90% of client assets have moved into Coinbase custody arrangements.
- Users will lose the daily Merkle-based mechanism for independently checking that their balances were included in published liabilities.
- Deribit remains subject to reserve, reconciliation and audit requirements, but has not announced an equivalent public replacement.
Deribit says the change reflects a restructuring of its wallet infrastructure during integration with Coinbase rather than a change in its 1:1 reserve obligations.
What Deribit users will no longer be able to verify daily
Deribit introduced its Proof of Reserves system in 2022 as crypto exchanges faced greater pressure to demonstrate that customer deposits were fully backed.
Its implementation combined two pieces of information.
First, Deribit published wallet information showing assets held under its direct control.
Second, it generated a cryptographic proof of liabilities using a modified Merkle-tree system. Customer balances were represented in a privacy-preserving structure, allowing individual clients to identify their own entries without exposing their balances publicly.
That gave users a way to check that their account had actually been included when Deribit calculated its aggregate liabilities.
Anyone could then compare those liabilities with the reserves disclosed by the exchange. Deribit generated snapshots daily.
From September 1, that public daily process ends.
The change therefore removes three capabilities from the public-facing system:
- Daily balance inclusion checks: Clients will no longer have the existing Merkle-based tool to confirm each day that their balances were included in Deribit’s published liabilities.
- Daily public liability data: Outside observers lose the same regular view of aggregate customer obligations.
- Direct reserve comparisons: The existing mechanism for comparing reported liabilities with Deribit’s disclosed onchain holdings will no longer be published daily.
Deribit has not announced an equivalent public dashboard or a replacement customer-level Merkle verification system.
Coinbase custody makes the old system less representative
The decision follows a substantial change in where Deribit client assets are held.
According to Deribit, roughly 90% of client assets have migrated into custody arrangements with Coinbase as the derivatives exchange is integrated into its new parent company’s infrastructure.
That creates a technical problem for the existing Proof of Reserves model.
Deribit’s own documentation already states that assets held with third-party custodians cannot be incorporated into the daily onchain asset reporting in the same way as assets under Deribit’s direct control.
The Proof of Reserves page therefore had an important limitation even before its removal: it was not designed to provide an onchain view of every asset held through external custodians.
With most customer assets now inside Coinbase custody arrangements, the portion directly observable through Deribit’s original wallet-based methodology has become substantially less representative of the platform’s overall custody structure.
That is the operational rationale behind retiring the existing publication.
Regulatory oversight remains, but it answers a different question
Ending the public page does not remove Deribit’s obligation to back customer assets.
Deribit operates as a VARA-regulated platform in Dubai and says client assets remain fully segregated. The company is still required to maintain reserves backing customer obligations.
Its August 27 notice also says independent Proof of Reserves audits will continue.
The distinction is frequency and accessibility.
The outgoing system gave individual customers a cryptographic verification mechanism that did not require them to rely exclusively on Deribit or an auditor’s conclusion.
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Regulatory reconciliation and external audits provide independent oversight, but customers cannot perform the same check whenever they choose.
After September 1, the transparency model therefore moves further from continuous public verification toward periodic institutional verification.
That does not indicate that reserves are missing. It changes who performs the verification and how frequently the result becomes available.
Deribit’s Coinbase integration goes far beyond custody
The reserve change is one component of a much larger consolidation.
Coinbase completed its acquisition of Deribit in August 2025, and the two companies are now combining their international derivatives infrastructure.
The next major step is scheduled for September 9, when perpetual trading previously powered by Coinbase International Exchange is expected to move onto Deribit.
For Coinbase International Exchange customers, open positions and balances will be migrated to the combined platform. Deribit will become the primary venue underpinning Coinbase’s global derivatives business, bringing perpetuals, dated futures and options into a unified infrastructure.
Coinbase says the consolidation is intended to combine liquidity that was previously split across the two venues while using Deribit’s matching engine and risk infrastructure.
For existing Deribit users, the exchange itself remains the trading interface. The larger change is happening underneath it, across custody, liquidity and infrastructure.
The Proof of Reserves retirement comes eight days before that scheduled derivatives migration.
Proof of Reserves was built for a different custody model
Deribit’s decision also highlights a structural limitation of exchange Proof of Reserves.
Cryptographic reserve systems work most cleanly when an exchange directly controls identifiable blockchain addresses. An observer can verify balances onchain, while a Merkle tree can provide evidence that customer liabilities were included without publishing individual account information.
Third-party custody complicates that model.
When assets are held through another regulated custodian, blockchain balances alone may not establish which assets economically belong to a particular exchange or its customers. Additional records from the custodian and exchange become necessary.
Deribit had already acknowledged this limitation in its reserve documentation, which specifically excluded assets held through third-party custodians from its directly controlled onchain reporting.
The shift toward Coinbase custody has made that exception much larger.
It also creates a broader question for crypto exchanges adopting institutional custody: whether public Proof of Reserves systems can evolve to verify externally custodied assets without sacrificing the direct, cryptographic transparency that made those systems useful in the first place.
The remaining transparency gap is the replacement
Deribit says the daily publication was a voluntary transparency initiative that went beyond its regulatory obligations. Its removal does not change how client assets are held, and independent oversight will continue.
What remains unresolved is whether users will receive another public mechanism adapted to the Coinbase custody structure.
No replacement dashboard has been announced. Nor has Deribit committed publicly to maintaining customer-level Merkle verification after September 1.
That distinction matters because audited reserves and cryptographic Proof of Reserves serve overlapping but different purposes. An audit gives customers an independent professional assessment at a particular reporting point. A public cryptographic system lets users perform part of the verification themselves and, in Deribit’s case, do so against daily snapshots.
The September change removes the latter.
As Coinbase and Deribit complete their derivatives integration on September 9, the next transparency question is therefore not whether Deribit remains subject to reserve requirements. It is whether the combined custody model eventually produces a new way for customers to independently verify assets and liabilities that are now distributed across institutional custody infrastructure.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Zdravkov
Reporter at CoinsPress
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
