Indian cryptocurrency exchange CoinSwitch on Thursday announced the second edition of its proof of reserves (POR), saying that the company’s total holdings (in crypto and fiat currency) are higher than those of its customers.
This signifies that the company maintains a holdings ratio of 1:1 or more, meaning that it holds all user assets and fiat balances. Such a ratio allows users to redeem or withdraw assets at any time, the company added.
In its blog, CoinSwitch added that it had published an independent POR review in November last year to demonstrate the company’s ‘robust practices’ and its ‘commitment to protecting user funds’. It also added that the company will continue this practice of ‘transparency and trust-building’.
POR is ‘proof’ that a financial entity has the holdings it claims to have. The equivalent value of CoinSwitch’s holdings in crypto and in Indian rupees stands at Rs 1944.8 crore, whereas the holdings of its customers in the same basket stand at Rs 1431.30 crore.
The company claims that this ratio is even higher in some cases such as for USDT (a cryptocurrency stablecoin), the ratio is 12.8:1; for BTC (bitcoin), it is 1.8:1; and for ETH (Ethereum), it is 1.03:1. The higher ratio is on account of CoinSwitch’s own crypto assets, the company added.
It also claimed that its cash and cash equivalent balance are 6.79 times the balance (in Indian rupees) of its users. “This signifies the company has strong financials,” the company said.
“As the largest crypto platform in the country, transparency is at the core of our values, and we take our responsibility toward all stakeholders very seriously. This led us to be the first of the crypto organizations in the country to announce POR last year. Through an independent review of our holdings and on-chain validation via our crypto wallet addresses, we ensure there are no blind spots, providing our users with complete visibility into our holdings,” said Ashish Singhal, co-founder and chief executive officer of CoinSwitch.
CoinSwitch said in a company blog post it has more than 19 million Indian users who use its exchange for trading in cryptocurrency.
First Published: Jul 27 2023 | 5:32 PM IST
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