Our commitment to transparency
Finst is the first and only Dutch crypto platform which has successfully conducted an extensive Proof of Reserves (PoR) audit. With Finst, your assets are segregated and held on a 1:1 basis, plus reserves.
What is a Proof of Reserves audit?
Proof of Reserves (PoR) is the process of verifying that the investors’ assets held by a cryptocurrency exchange or financial institution correspond to the assets the exchange effectively holds in reserve on behalf of its clients. In other words, PoR verifies what an exchange is supposed to hold and whether it matches what they effectively hold.
PoR is typically executed by a third-party auditor that will analyze the holdings and liabilities of a trading platform. The auditors aim to substantiate the claims made by the exchange and will subsequently publish the results to the public.
Why is Proof of Reserves important?
As a registered cryptocurrency exchange, Finst is fully committed to provide the highest safety and transparency standards. This is why we decided to conduct an extensive Proof of Reserves audit from a reputable third-party audit firm based in The Netherlands, AuditNow.
Traditional Proof of Reserves audits provide an assurance regarding the reserves a crypto exchange holds on-chain. As an investor, this should ultimately assure you that you can always withdraw your cryptocurrencies at any given time regardless of market circumstances.
What are the limitations of traditional Proof of Reserves audits?
While traditional Proof of Reserves audits offer some benefits, they do not necessarily provide a complete view on an exchange’s financial situation. At Finst, we believe in full transparency, which led us to request an extensive PoR audit that goes far beyond the limitations of the traditional approach.
Some inherent limitations of traditional PoR audits include:
- Focus solely on on-chain holdings, not off-chain holdings such as cash
- Dependence on the auditor's competence and reliability
- Limited validity over time – what is true today may not be true tomorrow
- Inability to verify whether an effective asset segregation is in place
- Not assessing whether assets can be transferred easily and by whom
- Not tracking the origin of the assets – they could have been borrowed to pass the audit
- No assurance that assets have not been used, e.g., by lending or pledging them to third parties
- No guarantee that an exchange has sufficient liquidity to meet massive withdrawal requests
- Often limited scope, not covering all assets listed on an exchange
Finst’s comprehensive Proof of Reserves audit
To uphold our commitment to safety and transparency, we conducted an extensive PoR audit that not only assesses our assets and liabilities but also addresses all the limitations of traditional audits.
Our extensive PoR audit, conducted by AuditNow, a reputable third-party auditor in The Netherlands, verified the following key points:
- Implementation of policies to correctly safeguard Finst's clients' assets
- Fulfillment of designated roles in the safeguarding procedures
- Strict restriction of assets transfers to designated senior management employees
- Assurance of no money flows beyond established policies
- Effective asset segregation through Stichting Finst Custody
- Holding all clients' assets in a separate bankruptcy-remote entity (Stichting Finst Custody) on a 1: 1 basis for both money and crypto assets
- Clients' assets held in a bank account and wallets in the name of Stichting Finst Custody, without any possibility of commingling funds
- No transfer or use of clients' assets by any other third party
- Full availability of clients' assets, with a maximum timeframe of 2 days
- Holding an excess of liquidity for each cryptocurrency listed on our platform
- Ability to process massive withdrawals of funds from our clients, if needed
- No liabilities for both Finst and Stichting Finst Custody
- Inclusion of all cryptocurrencies listed on our platform in the audit scope
At Finst, we don't stop at just one audit. We are devoted to regularly renewing our comprehensive Proof of Reserves audit to ensure continuous safety and transparency for our clients.
Which Dutch crypto exchanges provide Proof of Reserves?
Finst proudly stands as the first and only Dutch cryptocurrency platform to release an extensive Proof of Reserves. Every investor deserves access to accurate and comprehensive information about their exchange's financial situation and overall safety. We firmly believe that regular Proof of Reserves disclosure should become the standard for all crypto exchanges. This is why we extend an open invitation to all crypto platforms to join us in embracing this vital initiative. By publishing their own PoR, we can collectively enhance transparency and elevate the safety of the entire industry.