The crash of crypto exchange FTX last week has taken the crypto sector in general out of the investor spotlight. In the wake of this industry shakeup, Indian crypto exchange CoinSwitch Kuber claimed to have received a verification of its balances from an independent agency. Local consulting firm INMACS has pledged to confirm that CoinSwitch’s overall asset holdings are higher than those of clients, a move made to regain investor confidence.
The crypto exchange is essentially looking to strengthen its compliance structures. The reason why he chose INMACS is because of the association of the body with the Institute of Chartered Accountants of India. It had been going through its verification process on CoinSwitch since July 2022.
“Transparency and traceability are business imperatives for us. The independent INMACS report is a testament to our commitment and proactive approach to risk and compliance measures,” Ashish Singhal, CoinSwitch co-founder and CEO said in a press release.
However, it should be noted that the report confirms the sufficiency of CoinSwitch funds as of November 4, 2022, that is, more than two weeks ago. Between then and now, most crypto exchanges have seen a drop in business.
“As of November 4, 2022, CoinSwitch total holdings are greater than total user holdings. That is, the total holdings of INR and Crypto held by CoinSwitch are greater than those of Crypto and INR held by CoinSwitch on behalf of its users,” a CoinSwitch blog post said.
The FTX cryptocurrency exchange was thrown into chaos this month due to a lack of liquidity. The sequence of events reduced the total crypto market capitalization to $857.16 billion from its trillion dollar valuation last week.
Amid the chaos, another Indian crypto exchange, Giottus, recently confirmed its willingness to provide proof of reserve to its users, so that it could generate more engagement on its platform.
Singhal has also recognized that choosing the way Giottus did is also an option to attract more users.
This independently reviewed standby test report is one such step.
You can read more about why we think independent review is the right way to go here: https://t.co/aRY1eziD03
—Ashish Singhal (@ashish343) November 17, 2022
Proof of reserves are documents and evidence that demonstrate that a cryptocurrency exchange has sufficient assets to handle all emergency withdrawals.
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