Amid Turmoil In Crypto Market, CoinDCX Publishes Proof Of Reserves

Amid the ongoing turmoil in the cryptocurrency market, crypto exchange CoinDCX has published its full proof of reserves (PoR) with an audited report in a move which it claimed would increase transparency among its users.

According to the report, CoinDCX held crypto assets worth $157.93 Mn as of 6 PM on December 15, 2022, while its total liabilities stood at $155.30 Mn.

It must be noted that last month crypto exchange Binance also released its proof of reserves for Bitcoin (BTC) holdings to show evidence of its ability to cover its users’ assets one-for-one.

“While the current user sentiment is low key, it’s important to share maximum information to users about the safety of their VDAs. At CoinDCX, we are committed to staying transparent and it will be our endeavour to build a strong foundation which stands on the pillars of trust, safety, security for all,” Sumit Gupta, cofounder and CEO of CoinDCX, said.

The PoR is an on-chain and off-chain asset and liability balance along with a complete list of wallet addresses. CoinDCX has made PoR available for public viewing.

Last month, CoinDCX published a PoR report in partnership with Nansen. At that time, the exchange said that it was important to ensure a healthy Reserves to Liability (R2L) ratio. “We are working with reputed audit firms to certify our financial health and will publish this shortly,” the exchange said in a blogpost.

The latest report, published in partnership with crypto research firm Coingabbar, said that CoinDCX’s reserves are higher than its liabilities. The balance has been duly certified by the statutory auditor, SGCO &Co. LLP, Chartered Accountants, CoinDCX said in a statement.

CoinDCX now plans to post its PoR on a quarterly basis and is in the process of launching a dashboard to show its reserves and liabilities in real-time.

The move comes days after the crash of the world’s third-largest crypto exchange FTX, which has impacted the trust of crypto investors. Most of the assets held by the crypto exchange were in its native token FTX, which it had leveraged to take on more debt. That resulted in a hole in its balance sheets, and once the news was out, the exchange collapsed.

FTX held $6 Bn in its native token which was devalued overnight and the crypto exchange was left with no option other than filing for bankruptcy.

While the Indian crypto market has around 2.5 Cr investors, around 5 Lakh investors owned FTX’s native token FTT, bearing the direct impact of the crash, industry experts told Inc42.

Other than FTX, asset-backed lending and borrowing platform Vauld also suspended its operations due to significant customer withdrawals and filed for bankruptcy. Moreover, crypto token LUNA’s crash also wiped out the investments of nearly 2.3 Lakh Indians earlier this year.

Meanwhile, the Group of 20 (G20) countries are trying to reach a policy consensus on crypto assets for better global regulations.

“The regulation should flow from the policy view taken. In fact, one of the priorities which have been put on the table is to help countries build a consensus for policy approach to the crypto assets,” India’s Economic Affairs Secretary Ajay Seth said recently.