At a crypto casino your balance is the casino's promise. The money that appears in the account is actually in the casino's wallet, and your claim against it holds only as long as the casino can and will pay. In a bank deposits are protected by a guarantee scheme, and an operator with an Estonian licence by supervision. A foreign crypto casino has neither.
So it is natural to ask: does the casino even have as much money as it owes players? The crypto world's answer to that question is proof of reserves.
Where the idea came from
In November 2022 the exchange FTX collapsed. It emerged that customer money was not where it was supposed to be, and billions went unpaid. After that several large exchanges began publishing proof that they held at least as much crypto as all customer accounts combined. Some crypto casinos have started talking about the same thing.
How a proper proof works
A proof of reserves has two parts. Both halves have to be there, otherwise it does not prove what it claims.
The assets half. The service publishes addresses on the chain and shows that it controls them — for example by signing a published message with each address's key. Anyone can check the addresses' balances in a block explorer. If the service keeps money in cold wallets or a multisig setup, those addresses are visible too.
The liabilities half. The service gathers all customers' balances into a Merkle tree: each balance is hashed, the hashes are combined in pairs until one root hash remains. The root is published. Each customer gets a proof from their account with which to check that their balance is in the tree and the tree's root matches the published one, without other balances becoming public. Background: Merkle tree on Wikipedia.
If assets are at least as large as liabilities, the service was covered at the moment of the proof.
Four limitations the advertising does not mention
1. The proof is a snapshot. It shows the state at one moment. Assets can move right afterwards, and in theory they may have been borrowed for the time of the proof. The less often the proof is updated, the less it says.
2. Addresses alone are not a proof. If a casino publishes wallet addresses but not the liabilities tree, you know how many assets there are but not whether they are enough. Ten million dollars is a lot if players are owed five, and little if they are owed fifteen.
3. Other debts stay invisible. The Merkle tree contains customer balances, not the casino's loans, salaries or other obligations. A service can be covered towards customers and still be insolvent.
4. Self-published is not audited. If no independent third party has confirmed the proof, it is the service's own claim. Even an audit checks only what it was shown.
What a player can do themselves
If a casino says it publishes a proof of reserves, check three things:
- Whether both halves are published — both the addresses and the root of the liabilities tree.
- How often the proof is updated and when it last was.
- Whether your own balance is verifiable — whether the account settings contain a proof with which you can find your entry in the tree.
If a casino does not publish a proof of reserves, that does not automatically mean something is wrong — PoR is rare among crypto casinos. It simply means the signals at your disposal are others: a verifiable licence (see Curaçao licence and the CGA's official site), time in operation, withdrawal speed and clear terms. Our measurement statistics show how the editorial team actually measures withdrawals.
The best proof of reserves is your own wallet
No proof turns a casino balance into yours. Practical protection is simple: keep only the amount you plan to play at the casino and move winnings quickly to your own non-custodial wallet. Step by step: how to withdraw from a crypto casino. A safe play routine: crypto casino security.
And if you doubt a casino's solvency, do not keep playing in the hope that a win will solve the worry. Withdraw the money. If that is hard, the free number 15410 helps.
Frequently asked questions
Is a casino with a proof of reserves safe?
Safer than without, if the proof covers both assets and liabilities and is updated often. It is no guarantee: the proof is a snapshot and does not show the casino's other debts.
How do I check my balance in the Merkle tree?
If the casino allows it, you find your entry and proof in the account settings. You enter them into a verifier that computes the root hash and compares it with the published one. If there is no such option, you cannot check your balance against the proof.
Are provably fair and proof of reserves the same thing?
No. Provably fair proves that a single game's result was not changed. Proof of reserves tries to prove that the casino has enough money to cover balances. One does not replace the other.