The crash of the FTX crypto exchange last week has kicked the overall crypto sector out of the focus of investors. In the aftermath of this industry shake-up, Indian crypto exchange CoinSwitch Kuber has claimed to have received a verification of its balance sheets from an independent agency. Home-grown consulting firm INMACS was roped in to confirm that the overall asset holdings of CoinSwitch are higher than those of customer holdings — a move made to earn back investor trust.
The crypto exchange is essentially looking to strengthen its compliance structures. The reason why it chose INMACS is because of the body’s association with the Institute of Chartered Accountants of India. It had been conducting its verification process on CoinSwitch since July 2022.
“Transparency and traceability are business imperatives for us. INMACS’ independent report is a testament to our commitment and proactive approach to risk and compliance measures,” Ashish Singhal, Co-founder and CEO, CoinSwitch said in a press statement.
It is however, noteworthy, that the report confirms of CoinSwitch’s fund sufficiency as of November 4, 2022, that is over two weeks ago. In between then and now, majority crypto exchanges have seen a drop in their businesses.
“As of November 4, 2022, the total CoinSwitch holdings are greater than total user’s holdings. That is, the total INR and Crypto holdings held by CoinSwitch are greater than the Crypto and INR held by CoinSwitch on behalf of its users,” a blog post by CoinSwitch said.
The FTX crypto exchange was thrown into turmoil this month due to lack of liquidity. The sequence of events slashed the total crypto market cap to $857.16 billion from its trillion-dollar valuation last week.
Amid the chaos, another Indian crypto exchange Giottus recently vouched its readiness to provide proof-of-reserves to its users, so that it could trigger more engagement on its platform.
Singhal has also acknowledged that choosing a way that Giottus did is also an option to rope-in more users.
This independently reviewed Proof of Reserve report is one such step.
You can read more on why we think the independent review is the right way forward here:https://t.co/aRY1eziD03
— Ashish Singhal (@ashish343) November 17, 2022
Proof of reserves are documents and evidence that demonstrate that a crypto exchange has sufficient assets to handle all withdrawals in cases of emergencies.
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