CoinSwitch says it has surplus crypto assets from users worth Rs 1,083 cr

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On Friday, cryptocurrency exchange CoinSwitch revealed that it currently holds about Rs 1,083.45 crore of its users’ assets and has enough reserves to meet withdrawals made by them even in turbulent period.

The company, backed by leading global investors such as Andreesen Horowitz (a16z), Tiger Global and Sequoia Capital, released its proof of reserves report in a bid to bring more transparency to its users. The report, authored by financial auditor INMACS, states that the company held more assets than its users’ holdings on its platform and did not borrow or reinvest against any of its users’ crypto assets.

According to the report, CoinSwitch holds 7.21 times more cash in rupees, compared to those held by its users on its platform. In the case of Bitcoins (BTC), CoinSwitch holds 1.71 BTC for every bitcoin held by its users. For another popular cryptocurrency, Ethereum, that ratio is 1:1.03, the report says.

Eighty-five percent of crypto assets held by CoinSwitch users are held in its custodial wallets while the remaining 15 percent are held on other exchanges such as CoinDCX, WazirX, Binance, and CoinSwitchX. The report is based on an audit of assets and balances carried out on November 4. The company shared the addresses of its top wallets on Friday, allowing users to verify its claims.

As of January 6, 2023, the company held approximately Rs 933.83 crore of assets in these portfolios. At the time of the assessment, it represented 86.2% of all user assets in its custody. The remaining assets, worth Rs 149.62 crore, are held on various exchanges such as CoinDCX, WazirX and Binance.

“Since we made our wallet addresses public, users or researchers can use any of the publicly available blockchain explorers to independently verify holdings in these wallets. We believe this is a more open and flexible approach to validating holdings,” the company said in sharing the report.

Global cryptocurrency exchanges have seen a sharp decline after investors withdrew billions of dollars from the crypto markets. The collapse of the world’s second-largest crypto exchange, FTX, its native token FTT, and sister trading firm Alameda Research has prompted users to withdraw massive amounts of crypto-related assets. CoinSwitch said it has no exposure to FTX.

“We launched the review even before the FTX crisis. We voluntarily started this exercise in July 2022 as part of our trust and safety practices sometime after the crypto market crash in mid-2022 and Vauld’s collapse. Now that we have published our wallet addresses, our current crypto holdings can be validated by anyone on-chain,” CoinSwitch said.

According to news website Bitcoin.com, owners of Bitcoin, Ethereum, and Stablecoin withdrew around $19.19 billion in crypto assets from centralized exchanges in just 50 days after FTX collapsed on Nov. 5. Nearly 356,848 bitcoins and 4.48 million Ethereum units were withdrawn from crypto. trading platforms around the world since then.

Declining user confidence after the FTX crash has worsened the situation for Indian crypto firms, prompting them to implement new transparency measures. CoinSwitch competitor CoinDCX, another top Indian exchange released its Proof of Reserves report in November, while WazirX may release its own report soon.

CoinSwitch recently diversified its solutions by adding seven new offerings, including fixed deposits, bonds, exchange-traded funds (ETFs), stocks, and mutual funds amid growing headwinds in the crypto market. .

“The past year has been turbulent, for the markets and the world in general. However, I believe that bear markets are the best time to slow down, reflect and build. And that’s what we did at CoinSwitch in 2022: we folded and built. I am excited to bring these products to you in 2023,” said Ashish Singhal, Co-Founder and CEO of CoinSwitch.

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