The recent crisis FTX is enduring has led to a recent trend among cryptocurrency exchanges to reveal their reserves. Following the recent trend is CoinSwitch a cryptocurrency exchange based in India that has unveiled its proof of reserves today.
According to a statement on its blog, assets in CoinSwitch’s reserve exceeded the value of the users’ funds in its custody. Notably, assets in the reserve contain cryptocurrency assets and fiats. Meanwhile, CoinSwitch has been working on the review before the commencement of the the crisis facing FTX. However, the release of the review coincides with the prevailing crisis that has affected numerous firms and investors.
In July, CoinSwitch consulted INMAC to work on reviewing its reserve, then, the cryptocurrency exchange provided the consultancy firm with relevant documents. These documents include snapshots of cryptocurrency custody services and bank account payment gateways used by the cryptocurrency exchange. In the statement backing the report, the firm established that it has more than 18 million users. Also, the firm said it hasn’t diverted users’ funds for lending and borrowing businesses.
Backing this position is the co-founder of CoinSwitch, Ashish Singhal who gave insight regarding the review. Singhal said “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.”
The increasing call for proof of reserves and compliance by CoinSwitch
In the statement, CoinSwitch cited the recent collapse of FTX as the reason for the Proof of Reserve. An extract of the release reads “The recent collapse of the global crypto exchange FTX has been a rude awakening for the global industry, and regaining the trust of the users and outside observers should be of the highest priority for every stakeholder in the industry. The growing call for exchanges and intermediaries to show proof of reserve is thus welcome.”
Worth noting that users are more concerned about the reliability of centralized cryptocurrency exchanges to safeguard their assets. On numerous occasions, the cryptocurrency space has witnessed the halting of withdrawals by exchanges as a result of reserve crisis. This birthed the increasing call for the release of proof of reserve by investors to guarantee the safety of their assets. A call CoinSwitch took with open arms.