A Letter of Guarantee — often shortened to LoG — is a PGP-signed message an exchange gives you that proves it received your deposit and states exactly where your swapped coins are supposed to go. It is, in effect, a cryptographically signed receipt for a trade where you would otherwise have nothing: no account, no login, and no support ticket tying the exchange to a promise. Most people never think about it — until a swap goes wrong. This guide explains what a Letter of Guarantee is, the problem it solves, how to verify one, and why the more privacy-focused exchanges are the ones that bother to offer it.
What is a Letter of Guarantee?
When you start a swap on an instant swap exchange, there is no account and no balance — you send coins to a one-time deposit address and the service sends the converted coins to an address you control. That model is fast and private, but it also means the exchange briefly holds your funds with nothing on paper. A Letter of Guarantee closes that gap. It is a short text document, signed with the exchange's PGP private key, that records the terms of your specific order.
Because it is signed, anyone can verify — using the exchange's public key — that the message genuinely came from that exchange and has not been altered by a single character. The exchange cannot later deny the terms, and you cannot forge better ones. That property is called non-repudiation, and it is the whole point of a LoG.
What's inside a Letter of Guarantee
The exact fields vary by exchange, but a Letter of Guarantee typically pins down everything that matters if a trade is disputed:
- The deposit address the exchange generated for you, and the coin/network expected.
- The amount you are sending (or the rate/quote the exchange committed to).
- The destination address — the wallet where your swapped coins are supposed to be sent.
- The output coin and estimated amount you should receive.
- The order ID and a timestamp, so the letter maps to one specific trade.
- The PGP signature block that seals all of the above.
In other words, the letter is a signed statement that says: "We, this exchange, acknowledge your deposit to this address, and we are obligated to send the output to that address." If the exchange later sends your coins somewhere else, pays the wrong amount, or ghosts you, the signed letter is proof of what was promised.
How the PGP signature makes it trustworthy
PGP (Pretty Good Privacy) lets the exchange sign a message with a private key that only it holds. The matching public key is published openly — on the exchange's website, in its documentation, and often on public keyservers. To check a Letter of Guarantee you:
- Import the exchange's published public key into your PGP tool — GnuPG, Kleopatra, or similar.
- Verify the signature on the letter against that key.
- Confirm the key you used is the exchange's real, long-published key — not one handed to you at the last moment.
A valid signature means the message is authentic and unmodified. This is the same trust model that lets you verify a signed software release, applied to a single trade. If the signature fails, treat the "guarantee" as worthless.
The problem a Letter of Guarantee solves
Instant swaps ask you to send first and trust the service to deliver. That is usually fine — reputable swappers complete millions of trades — but there is a real asymmetry: you have no account and no paper trail. If a swap stalls, if the exchange claims your deposit "never arrived," or if it quietly changes the payout, you normally have nothing to point to. A Letter of Guarantee turns "trust me" into evidence. It is portable proof, signed by the exchange itself, that you can hold, archive, and — crucially — show to other people.
It doesn't stop a bad actor from misbehaving, but it makes misbehavior provable, which changes the incentives entirely.
Why it matters: disputes and accountability
The value of a LoG shows up in the rare-but-painful cases:
- Disputes. If your coins don't arrive or the amount is wrong, you can present a signed letter to the exchange's support, to an aggregator's arbitration process, or publicly on a forum. The signature means no one can wave it away as "he-said, she-said."
- Public accountability. Because anyone can verify the signature against the exchange's public key, you can post a Letter of Guarantee publicly and the whole community can confirm it is real. A swapper that reneges on a signed letter torches its own reputation.
- Non-repudiation. The exchange can't claim it never agreed to those terms. The cryptography says otherwise.
Think of it as the privacy-preserving equivalent of a paper contract: you keep your anonymity and no account, but you still walk away with something that binds the other side.
Which exchanges offer a Letter of Guarantee?
Letters of Guarantee are not common. Most mainstream swappers don't provide one, and plenty of users have never heard the term. Where you do see them is among the more privacy-focused, no-KYC exchanges — the same services that publish PGP keys, run Tor and I2P mirrors, and take user sovereignty seriously. For them, a signed guarantee is a natural extension of a trust-minimizing philosophy: they can't (and won't) hold your identity, so they offer cryptographic accountability instead.
If you trade in size, or you're moving into a privacy coin like Monero where a mistake is hard to unwind, the presence of a Letter of Guarantee is a genuine mark of quality. It signals an exchange that expects to be held to its word.
How to use a Letter of Guarantee properly
- Get it before you send. The letter is only useful if you obtain and save it at the time you create the order — ideally before the deposit leaves your self-custody wallet.
- Verify the signature. Don't just save the text — actually check it against the exchange's long-published public key.
- Confirm the details match. The deposit address, destination address, and amounts in the letter must match what you're about to do.
- Keep it until the swap fully settles. Archive the letter (and your deposit transaction ID) until the output has arrived and confirmed. Then it's your receipt if anything is questioned later.
Bottom line
A Letter of Guarantee is a small thing that matters enormously in the moment you need it. It converts the one leg of an instant swap that requires trust into signed, verifiable proof of exactly what the exchange committed to — the deposit it received and the wallet it must pay. It's uncommon, and you may never have to use one. But when a trade goes sideways, a PGP-signed guarantee is the difference between a frustrating dead end and an open-and-shut case. Favor exchanges that offer it, learn to verify it, and keep it until your coins land.
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