What is attestation?

A report in which an accounting firm checks a company's own statement about its holdings at a chosen moment, under standards weaker than a full audit.

Most crypto reserve reports are attestations: they cover assets on one date, rarely cover liabilities or related-party loans, and say nothing about the next day.

The word is doing a lot of work in exchange marketing. "Audited by a top firm" and "attested by a top firm" read almost identically to a customer and mean substantially different things about what was tested and what the firm is standing behind.

How it works

An audit is an opinion on a full set of financial statements, prepared under a framework, covering a period, and giving reasonable assurance that the statements are free of material misstatement. It looks at both sides of the balance sheet.

An attestation engagement is narrower by design. Management writes an assertion, such as "at 00:00 on this date we held these assets at these addresses," and the practitioner reports on that specific assertion. The scope is whatever management chose to assert.

Three limits recur in crypto reserve reports. They are point-in-time, so assets can move the following hour. They frequently cover assets without covering customer liabilities, so a full balance is meaningless without knowing what is owed against it. And they may not test whether the assets were borrowed for the occasion, which is the specific failure that made the term familiar.

A serious proof of reserves exercise addresses the liability side, typically by publishing a merkle tree of customer balances so each customer can verify inclusion of their own account without seeing anyone else's.

Example

Illustrative: an exchange publishes an attestation showing $2.4 billion of assets at named addresses on 31 March. The report does not state customer liabilities. If customers are owed $2.2 billion, the venue is over-collateralized by 9%. If they are owed $2.6 billion, it is short by $200 million. The same report is consistent with both, because the number that would tell you apart was never in scope.

Why it matters when you buy

Where you leave a balance between trades is a credit decision, and an attestation is one of the few public inputs you have. Read what it covers rather than who signed it: the date, whether liabilities are included, and whether customers can verify their own balance in a published tree. See the proof of reserves guide and the guide on protecting yourself from an exchange collapse.

Related terms

• proof of reserves — the fuller exercise including liabilities
• proof of liabilities — the customer-balance half
• merkle tree — how customers verify their own inclusion
• custodian — who actually holds the assets
• segregated accounts — keeping customer assets separate
• rehypothecation — the reuse an attestation may not detect

Questions

Is an attestation worthless?

No, but it is narrow. It confirms a specific management assertion on a specific date. Used alongside a published liability tree it is genuinely informative; used alone it shows one side of a balance sheet.

Why do exchanges publish attestations rather than audits?

Auditing a crypto venue is harder and slower, and several large firms withdrew from the work after 2022. Attestations are faster, cheaper, and narrower in what the firm stands behind.

How do I check my own balance is included?

Only if the venue publishes a merkle tree of liabilities and gives you your leaf and proof. Where it does, the check takes seconds and is worth doing after each publication.