How we measure exchange transparency

01 · 25%

Asset Verification

What evidence supports the exchange’s reserve-asset claims?

• —Audited financial statements, base 95: the relevant entity’s customer assets and broader asset position are formally audited. The base rises to 100 when the exchange also publishes a Merkle/zk cryptographic Proof of Reserves the public can self-verify.
• —Cryptographic asset proof plus an asset attestation, base 80.
• —Cryptographic asset proof plus agreed-upon procedures, base 70.
• —Cryptographic asset proof without independent audit, base 65.
• —Standalone third-party asset attestation, base 60.
• —Standalone asset agreed-upon procedures, base 45.
• —No meaningful asset verification, base 20.
• —−15 when confidence in the recorded facts is estimated.

The financial-statement tier requires audit scope covering the relevant operating entity and customer assets; reaching the full 100 additionally requires a user-verifiable cryptographic proof. Public wallet verification and freshness are evaluated separately.

02 · 25%

Liability Verification

Can customer balances owed by the exchange be checked?

• —Audited financial statements, base 95: the relevant entity’s customer obligations and broader liabilities are formally audited. The base rises to 100 when the exchange also publishes a Merkle/zk cryptographic liability proof the public can self-verify.
• —Global cryptographic liability proof plus a liability attestation, base 70.
• —Global cryptographic liability proof plus agreed-upon procedures, base 67.
• —Global cryptographic liability proof without independent audit, base 65.
• —Standalone third-party liability attestation, base 55.
• —Standalone liability agreed-upon procedures, base 45.
• —Exchange disclosure without independent verification, base 30.
• —Base 20 when total customer liabilities are not demonstrably verified.
• —−15 when confidence in the recorded facts is estimated.

Assurance raises a component only when its documented scope covers that component. Agreed-upon procedures report findings but do not provide an assurance conclusion. Public reproducibility and user inclusion are evaluated separately.

03 · 15%

Proof Freshness

How frequently is proof published, and how old is the latest snapshot?

• —Score the demonstrated cadence ceiling: continuous 100; daily 95; weekly 85; monthly 75; quarterly 55; yearly 35; ad hoc or unknown 25.
• —Score absolute snapshot age: ≤1 day 100; ≤7 days 90; ≤31 days 75; ≤92 days 55; ≤366 days 35; older 15.
• —Use the lower of the cadence ceiling and absolute-age score.
• —No dated proof: 0.

Continuous requires continuously updated asset and liability evidence. A live reserve-wallet balance alone does not qualify, and claimed cadence should be supported by publication history.

04 · 15%

Public Verifiability

How much of the evidence can outsiders independently reproduce?

• —Base: 25, reduced to 10 when all evaluated evidence is opaque.
• —Liability verification: LPOR +25; global ZK proof +18; Merkle-sum +10; plain Merkle inclusion, auditor-only, or none +0.
• —User inclusion/root check: full +25; partial +12; none +0.
• —Reserve-wallet disclosure: full +25; partial +12; none +0.

05 · 10%

Methodology Transparency

Does the exchange explain how its proof was produced?

• —Base: 60.
• —+15 when a public proof URL is available.
• —+10 when at least two citable sources are recorded.
• —+10 when a cryptographic method such as Merkle or zk is named.
• —−10 when confidence in the recorded facts is estimated.

06 · 10%

Incident Disclosure

What relevant incidents are present in the current record?

• —Base: 85.
• —Initial penalty by severity: high 15; medium 8; low 4.
• —Penalty retained by age: under 1 year 100%; 1–3 years 75%; 3–5 years 50%; over 5 years 25%.
• —Unresolved incidents retain 100% of their penalty. Monitoring incidents retain at least 50%.
• —The retained penalty is reduced by 20% when the exchange responded.
• —The component score has a floor of 40.

A response does not by itself establish that disclosure was timely or adequate. Historical incidents retain a minimum penalty and are never erased.