When reserves must be evidenced: what it costs to be wrong
Reserves must be evidenced the moment an issuer states, in a white paper or in marketing, that a token is backed by held assets. Evidencing means producing a document trail an outside party can check: ledger entries, custodian confirmations, and reconciliation dates. Get it wrong, and the token loses its claimed backing status immediately, not after review.
The legal basis
The reserve obligation for asset-referenced and e-money tokens sits inside Regulation (EU) 2023/1114 (MiCA). It requires an issuer to hold reserve assets matching the claim made to the public, and to be able to show that match on demand, not only at the point of the white paper. Where reserve assets move between custodians, or cross a border to a new one, that movement is a transfer in its own right. Regulation (EU) 2023/1113 (TFR) attaches its own information duties to that transfer, independent of what the reserve claim itself says.
What changes in practice
Once a reserve claim reaches the public domain, the obligation to evidence it does not wait for a supervisory request. A gap between the ledger and the public statement is a live problem from the day it exists, not from the day someone finds it. In practice, this changes three things: issuance can be suspended pending correction, an already-published white paper may need amendment, and a trading venue can suspend the token rather than carry an unverified reserve claim.
| Reserve claim | What must be evidenced | Applicable framework |
|---|---|---|
| Fiat-backed reserve | Custodian or bank confirmation matching the disclosed ledger | Regulation (EU) 2023/1114 (MiCA) |
| Reserve held in other assets | Valuation and composition matching the disclosed limits | Regulation (EU) 2023/1114 (MiCA) |
| Reserve moved to a new custodian | Sender and beneficiary information attached to that transfer | Regulation (EU) 2023/1113 (TFR) |
What to do, in order
- Instruct the compliance officer to pull the reserve ledger as it stood on the date of the last public disclosure.
- Ask the custodian, in writing, to confirm segregation of reserve assets by instrument and by currency.
- Route any transfer of reserve assets between custodians through a channel that preserves the sender and beneficiary information required under Regulation (EU) 2023/1113 (TFR).
- Hold new issuance until the reserve statement reconciles with the ledger, not after the next scheduled disclosure.
- Notify the home Member State authority of the gap before the next disclosure date, not after it.
Who decides, and how
The competent authority of the issuer's home Member State decides first. It works from the evidence file the issuer submits: ledger, custodian confirmations, and any transfer records. It acts within a period it sets under its own procedure, and that period is not something this page certifies. A refusal or a suspension can be challenged through the review route that authority publishes; this page does not describe that route in detail, because the answer differs by Member State.
For a sense of how a comparable evidence file typically moves through review, see Delivery statistics, published automatically and who decides.
Common forks
If reserves are held entirely in fiat, evidencing is largely a documentary exercise: bank statements, custodian letters, and dates that line up. If reserves include other crypto-assets, evidencing depends on valuation at a stated moment, and the composition limits inside Regulation (EU) 2023/1114 (MiCA) apply on top of the documentary check. If reserve assets are moved to a new custodian, even inside the same group, that specific transfer carries its own information duty under Regulation (EU) 2023/1113 (TFR), separate from the reserve claim it supports.
What this page does not cover
This page settles what must be evidenced and who decides on it. It does not establish whether a named counterparty actually holds what it claims to hold, whether a custodian document is authentic, or whether a reserve is truly located in the jurisdiction the issuer names.
Whether a counterparty is real, and what is known about it, is a separate factual question, answered by a file rather than by a regulation. See Counterparty report norway.
Whether a custodian document is authentic is also a separate question. See Document report norway for what a document check can and cannot confirm.
Whether a reserve is truly located where the issuer says it is sits behind a third question again. See Jurisdiction report norway for what a stated jurisdiction can be checked against.
Checked and sourced
Checked on 3 March 2025 against the consolidated texts of Regulation (EU) 2023/1114 (MiCA) and Regulation (EU) 2023/1113 (TFR), both in force from 30 December 2024. No national implementing measure is cited here, because the evidencing duty for reserves sits at the level of the two Regulations directly.
Related reading
For the sibling situation on refusal at listing stage, see A listing is refused token issuance what it costs.
If a reserve gap is already public, the first response comes from a partner within minutes during business hours. A price for the evidencing file itself follows within one business day.
Frequently asked questions
What is the first step when reserves must be evidenced?
Pull the reserve ledger as it stood on the date of the last public disclosure, then match it against custodian confirmations for the same date.
Which deadline is already running?
The clock that matters is the gap between the public reserve claim and the day it can be evidenced, not a dedicated notice period. That gap is live from day one.
Who decides, and on what evidence?
The competent authority of the issuer's home Member State decides, working from the ledger, the custodian confirmations, and any transfer records tied to the reserve.