Transparent Oversight for Financial Integrity

At ProofPay, auditability is not an afterthought — it is a foundational design principle that distinguishes us from conventional stablecoin models. The Audit section of our Public Records and Reports provides ongoing, verifiable insights into the financial health, operational integrity, and reserve backing of our platform.

This approach directly addresses the growing demand for continuous transparency — not just periodic, marketing-driven attestations — from regulators, institutional partners, and public stakeholders.

Our Commitment to Rigorous Auditing

Stablecoin ecosystems have historically been criticized for:

• Infrequent and non-standardized reporting
• Limited access to audit data
• Ambiguity in reserve composition
• Reactive responses to regulatory scrutiny

ProofPay corrects these deficiencies through a proactive, high-frequency, multi-layer audit process that meets and exceeds:

• Global financial audit standards
• Emerging stablecoin regulations
• Public expectations for open financial systems

Every Tensor and treasury-backed reserve within the ProofPay ecosystem is subject to continuous, tamper-evident oversight.

Audit Structure and Methodology

The Audit category spans four key transparency dimensions:

1. Real-Time System State Audits

• Merkle tree-based audit proofs published at fixed intervals (e.g., every 10 minutes).
• Anchors Tensor ownership, transfers, and restrictions to a public blockchain.
• Ensures tamper-evident snapshot history for both on-chain and off-chain balances.

2. Reserve Verification Audits

• Conducted by licensed third-party audit firms on a periodic basis.
• Verifies 100% reserve backing using regulated near-cash equivalents.
• Audits include denomination matching, FX peg integrity, and reserve geography.

3. Operational Process Audits

• Internal audits cover mint/redeem controls, escrow logic, and issuance integrity.
• Evaluated by independent compliance teams and externally verified.

4. Governance and Administrative Action Audits

• Tracks all admin actions: freezes, unlocks, policy changes, emergency overrides.
• All actions are transparently logged and anchored using Merkle trees.
• Available for public or regulatory review to assess issuer governance behavior.

Public Disclosure and Reporting Standards

ProofPay publishes audit outcomes under the Public Records and Reports → Audit section:

• Quarterly Audit Reports from licensed accounting firms
• Monthly Merkle Tree Anchoring Logs for system state
• Weekly Reserve Balance Snapshots
• Annual Transparency Reports
• Emergency Incident Disclosures for financial anomalies

This tiered reporting model serves:

• Retail users — through real-time dashboards and summaries
• Regulators and auditors — with cryptographic proofs and raw data access
• Institutional partners — via API integrations for automated validation

Audit Compliance Scope

Our audit framework is built for jurisdictional alignment and global integrity:

• Aligned with stablecoin regulations like:
  • MiCA (EU)
  • U.S. Stablecoin Acts (GENIUS Act, TRUST Act)
  • MAS DPT Guidelines (Singapore)
• Compliant with international audit standards:
  • IFRS (financial reporting)
  • SSAE 18 (SOC 1 & 2)
  • ISAE 3402 (control assurance)
• Prepared for bank-grade oversight to enable partnerships with regulated financial institutions worldwide.

Why This Level of Audit Matters

Most stablecoins rely on:

• Infrequent attestations with unclear asset disclosures
• No per-token or per-transaction auditability
• No transparency into administrative actions

ProofPay sets a higher standard through:

• Real-time auditability at both Tensor and system-wide levels
• End-to-end visibility of reserves, transactions, and governance
• Cryptographically anchored public audit trails, even usable offline

Summary

The Audit section of Public Records and Reports is a cornerstone of ProofPay’s commitment to radical transparency and financial trust.

It represents a real-time, cryptographically anchored system that ensures every dollar within the ProofPay ecosystem is auditable, verifiable, and accountable — anytime, anywhere.