Indian crypto exchange CoinSwitch has announced that its proof of reserves shows its overall holdings exceed its customers’ stake. It says proof of reserves is the solution to the prevailing crypto Crisis.
CoinSwitch says its holdings exceed its clients’
Popular Indian cryptocurrency trading app, CoinSwitch shared its proof of reserves summary on Thursday, November 17, 2022, stating that as of Nov. 4, the exchange’s overall holdings of crypto and fiat balances in Indian Rupees (INR) exceeded those held by the exchange on behalf of its users.
In its earlier press release, CoinSwitch stated that an “independent review had confirmed its assertion”.
“CoinSwitch’s overall holdings of Indian Rupees on our books and crypto assets held in custody are greater than customer holdings, an independent review of the company’s books and custody services has confirmed.”The report read.
On the “independent review”, Coinswitch revealed that the review was carried out by INMACS, a 38-year-old public limited company registered in India. Founded by Vinad Jain, INMACS specializes in assurance, taxation, regulatory advisory, and risk management, among other services. The review was conducted by comparing the total CoinSwitch’s crypto and INR holdings with customers’ crypto and INR holdings with CoinSwitch to understand whether total CoinSwitch holdings were greater or equal to or less than customer holdings. According to CoinSwitch, the review results showed that it had not used any crypto or INR balance belonging to its over 18 million registered users. They said the exchange had not used customers for lending or borrowing purposes.
CoinSwitch says proof of reserves is the key to regaining the trust of crypto users
Amidst the current uncertainty and distrust in the crypto markets, CoinSwitch believes publishing proof of reserve is crucial to regaining the trust of cryptocurrency “users and outside observers”. According to the firm, this should be the highest priority for every stakeholder in the industry.
“There are several other ways to assure liquidity of a crypto platform, including proof of reserves. This report is our effort to affirm that our holdings are greater than what customers have purchased on CoinSwitch.”CoinSwitch co-founder said.
However, CoinSwitch stated that “a representation of the crypto and fiat holdings without an independent review falls short of the high standards the industry should benchmark itself against”. This is because, in the firm’s view, the various crypto exchanges and intermediaries are responsible for being proactive and transparent in the absence of regulations that mandate these reviews.
Coin switch has promised to make more similar moves in future, stating that this “is just the beginning”.