HTX Proof of Reserves: Stablecoin Balances Don't Add Up

On-chain evidence published on 23 September 2026 shows that HTX, the exchange controlled by Justin Sun, filed a September proof of reserves (PoR) that misrepresented balances for two stablecoins. The reported figures for USDS and USDD cannot be reconciled with the blockchain state at the block heights HTX itself cited. For accounting firms, auditors, and CFOs that rely on exchange PoR disclosures when verifying client or treasury holdings, the episode is a direct challenge to how much weight those disclosures can bear without independent verification.

What HTX's September PoR Actually Claimed

HTX's September proof of reserves, dated 1 September 2026, stated that it held specific stablecoin balances in two named Ethereum addresses at block height 25,876,316. Both claims, when checked against on-chain data, fail to hold up.

The USDS discrepancy

The PoR reported 360,949.90 USDS sitting in address 0xdaa4393013f359fd63a133a3b893d311aba4e471 at block height 25,876,316. On-chain records tell a different story: the only transaction that brought USDS into that address occurred at a block height corresponding to 2 September, the day after the PoR snapshot date. At the claimed block height, the address held no USDS at all. The balance HTX reported simply did not exist at the moment it said it did.

The USDD discrepancy

The same PoR claimed 44,975,772.00 USDD in address 0x18709e89bd403f470088abdacebe86cc60dda12e at the same block height. On-chain data shows the address did hold USDD at that point, but not the amount stated in the disclosure. The figure HTX published does not match what the blockchain records for that address and block.

A Pattern, Not an Isolated Incident

Protos had previously documented a similar discrepancy in HTX's May 2026 PoR. In that earlier filing, HTX reported holding a specific quantity of STEAK-USDC in a named address at the claimed block height. The address held no STEAK-USDC at that point. It did, however, hold an equivalent amount of sUSDS, a different asset entirely. The inference is that HTX confused two distinct tokens when preparing that disclosure, rather than verifying balances directly against on-chain state.

Taken together, three separate stablecoin balance claims across two PoR filings are contradicted by publicly available blockchain data. HTX did not respond to Protos before publication.

Why This Matters for Accounting and Audit Professionals

Proof of reserves has been widely discussed as a transparency mechanism following high-profile exchange collapses. The premise is straightforward: an exchange publishes wallet addresses and block heights, and anyone can verify the claimed balances on a public explorer. When the published figures do not match on-chain reality at the stated snapshot, the entire mechanism breaks down.

The liability-matching question

The most serious accounting concern is not simply that a number is wrong. It is the question of whether liabilities are being matched to real assets at all times. A PoR snapshot is meant to demonstrate that customer deposits are backed by identifiable, on-chain holdings at a specific moment. If an exchange reports a balance that only arrived the day after the snapshot, the snapshot provides no assurance about the liability position at the time it purports to cover. From an accounting standpoint, a balance booked on 1 September that was only funded on 2 September is a post-period receipt, not a valid asset at the reporting date.

Asset misclassification risk

The May incident, where STEAK-USDC was reported but sUSDS was actually present, introduces a separate category of risk: asset misclassification. Two tokens with different risk profiles, different issuers, and different liquidity characteristics were effectively treated as interchangeable in a public disclosure. For a firm auditing a client whose assets are held at an exchange, a misclassified PoR line item could flow directly into a misstated balance sheet if taken at face value.

What reliable crypto accounting software should do

These discrepancies highlight a core requirement for any serious crypto accounting software or digital asset accounting software deployment: automated on-chain reconciliation should sit alongside, not behind, exchange-reported figures. A system that ingests PoR PDFs or CSV exports without cross-referencing the stated block height on a block explorer is not performing verification; it is performing transcription. Firms building or procuring crypto bookkeeping software workflows for exchange-held assets need to build that block-height check into the reconciliation layer, not treat it as an optional audit step.

Implications for Accounting Firms and CFOs

The practical impact depends on context, but several concrete issues arise for professional readers.

Client asset verification

If you are a firm with clients who hold assets at HTX, or at any exchange that self-publishes PoR disclosures, you cannot treat those disclosures as independently verified. The HTX case demonstrates that a published figure can be wrong in two distinct ways simultaneously: the balance may not have existed at the snapshot date, and the asset type may be misidentified. Standard audit procedures require verification against primary evidence. For on-chain assets, primary evidence is the block explorer record at the stated block height, not the exchange's own summary document.

Treasury and CFO exposure

Corporate treasuries that hold stablecoins at centralised exchanges and rely on monthly or quarterly PoR snapshots for board-level reporting face the same exposure. A PoR that is materially incorrect at the snapshot date could cause a treasury balance to be overstated in internal management accounts. Where those accounts feed into external reporting, the overstament could reach audited financial statements. CFOs should confirm that their treasury operations team or external custodian can produce block-height-level verification, not just a reference to the exchange's published PoR page.

Engagement letter and disclosure considerations

Accounting firms onboarding new clients with exchange-held digital assets should consider whether engagement letters explicitly address the verification standard for exchange balances. Relying on unverified PoR disclosures without noting that limitation in working papers creates professional risk if those disclosures later prove inaccurate. Documenting the independent on-chain check, including the block height queried and the result, is the minimum standard of evidence that a reasonable reviewer would expect.

The Broader PoR Debate

HTX's situation sits within a wider industry conversation about what proof of reserves actually proves. A PoR that is self-prepared, without a third-party auditor attesting to the process, is a self-assertion. It tells you what the exchange claims, not what an independent party has verified. Several exchanges have moved toward Merkle-tree-based PoR systems with third-party attestation, which raise the evidential standard. Others continue to publish self-prepared balance snapshots, sometimes without clearly disclosing the methodology.

For a deeper look at how stablecoin-specific disclosure requirements are evolving at the regulatory level, the ongoing debate around stablecoin accounting and the evolving MiCA liquidity framework is directly relevant: regulators are increasingly focused on the gap between reported and verifiable reserve positions. Separately, the techniques used to trace wallet behaviour on-chain, covered in our piece on how blockchain behavioural detection flags suspect wallets, are the same class of on-chain forensics that would surface a post-dated funding transaction like the one seen in HTX's USDS address.

Immediate Steps for Firms

Given the documented discrepancies, three actions are worth prioritising now.

Re-verify any HTX PoR balances in current workpapers

If any current engagement references HTX's September or May 2026 PoR figures as supporting evidence for a balance, those figures should be cross-checked against on-chain records at the stated block heights before finalising the workpaper. Where a discrepancy is found, it needs to be disclosed and the correct on-chain figure substituted.

Build block-height verification into standard operating procedure

Whether you are using dedicated digital asset accounting software or a manual reconciliation spreadsheet, the process should include a documented step where the team queries the stated address at the stated block height on a public explorer and records the result. This is not a significant technical lift: any major block explorer supports historical balance queries. Making it a required step, not an optional one, closes the gap that the HTX discrepancies expose.

Raise the evidential standard in client discussions

Where clients hold material balances at exchanges that self-publish PoR without third-party attestation, there is a conversation to have about whether that is an acceptable custody arrangement. This is not about singling out any single exchange: it is about the structural limitation of self-reported snapshots as audit evidence. The HTX case gives practitioners a concrete, documented example to reference when explaining why independent attestation matters.

Frequently Asked Questions

What is a proof of reserves and why does block height matter?

A proof of reserves is a disclosure in which an exchange publishes its wallet addresses and the balances it claims to hold, usually tied to a specific block height on the blockchain. Block height is the precise point in the blockchain's history at which the snapshot is taken. If an exchange states it held a balance at block height X, that claim can be verified by querying the address at that exact block using a public explorer. If the balance did not exist until block height X+N, the claim is wrong regardless of what the exchange later funded the address with.

Does a wrong PoR figure automatically mean fraud?

Not necessarily. Errors in PoR preparation can result from manual data-entry mistakes, asset misclassification, or a flawed internal process that does not verify on-chain state before publishing. The concern for accountants and auditors is not solely about intent: it is about the reliability of the disclosure as evidence. Whether the cause is error or misrepresentation, an inaccurate PoR cannot be used as supporting documentation for a client balance without independent corroboration.

How should an accounting firm treat exchange-held stablecoins under current standards?

Under IFRS 9 and IAS 32, stablecoins held at third parties are typically recognised as financial assets, with the exchange acting as a custodian. The existence and completeness assertions for those assets require evidence that the assets were actually held at the balance sheet date. A self-published PoR that cannot be independently corroborated does not meet that evidential threshold. Firms should seek either block-height verification via a public explorer or, where material, a third-party attestation report from the exchange's auditor.

What is the difference between USDS, USDD, and sUSUS mentioned in the article?

USDS and USDD are distinct stablecoins with different issuers, collateralisation mechanisms, and risk profiles. sUSDS is a yield-bearing or staked variant of USDS. Treating them as interchangeable in a financial disclosure, as appears to have happened in HTX's May PoR, is an asset misclassification. For accounting purposes, each token must be identified by its correct contract address and classified according to its actual economic characteristics, not its approximate dollar value.

Are there regulatory requirements for exchanges to publish accurate proof of reserves?

Requirements vary by jurisdiction. Some regulators have introduced or proposed PoR obligations with specific methodology standards, including third-party attestation. In the European Union, MiCA imposes reserve and disclosure requirements on issuers of asset-referenced tokens, though exchange-level PoR standards for broader asset classes remain less uniformly codified. In the absence of a mandatory standard, the accuracy of a voluntary PoR is a matter of the exchange's own internal controls, which is precisely why independent on-chain verification by accounting professionals remains essential.

Source: Protos