Deribit Transfers 90% of Client Funds to Coinbase and Ends Daily Merkle Checks
Deribit relocated the majority of client assets to Coinbase Custody and discontinued daily public Merkle tree proof-of-reserves verifications.
Crypto derivatives platform Deribit transferred roughly 90% of user assets into institutional custody at Coinbase while ending its daily on-chain Merkle tree proof-of-reserves feature. The exchange will now rely on Dubai VARA compliance filings and periodic audited statements.
The decision trades real-time, user-verifiable cryptographic proofs for traditional institutional custody arrangements and regulatory oversight. While institutional custodians mitigate internal key-management risks, the removal of public Merkle verifications reduces transparency for individual retail traders.
Market participants may scrutinize how major derivatives platforms manage the trade-off between cryptographic transparency and institutional-grade qualified custody, potentially shaping industry standards for centralized exchange security disclosures.
Key takeaways
- Deribit migrated 90% of customer funds to Coinbase Custody for institutional management.
- The exchange phased out its public daily Merkle tree proof-of-reserves verification tool.
- Regulatory filings and periodic third-party audits will replace real-time on-chain checks.