WazirX Publishes Proof Of Reserves To Restore Trust In Ailing Crypto Ecosystem

In a bid to assuage jumpy retail investors, cryptocurrency exchange WazirX on Wednesday (January 11) published its proof of reserves (PoR). 

As per the available data, the value of user assets held by WazirX as of 11:10 PM on January 11, 2023 stood at $282.57 Mn. The company did not reveal the size of its liabilities but added that its reserves-to-liabilities ratio remained ‘more than 1:1’.

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

As part of the move, the startup made its wallet addresses, list of exchanges and an independent PoR report available to the public. The startup released the report to promote transparency and to build trust and security within the crypto community.

“We are committed to building India’s top crypto exchange responsibly and securely, and full transparency is a key part of that commitment. By making our wallet addresses, list of exchanges, and independent Proof of Reserves report available to the public, we hope to provide our users with the trust and security they deserve,” said WazirX vice-president Rajagopal Menon.

A perusal of the data revealed that the majority of user assets with WazirX are parked with Binance-based wallets. The Shiba Inu token accounts for 19% of WazirX’s total reserves, with the crypto exchange holding 6.09 Tn such token worth approximately $53.72 Mn. 

Besides, WazirX also holds 1,356.61 Bitcoins worth $23.6 Mn and 19,930.93 Ethereum tokens amounting to $26.51 Mn. While Bitcoin accounts for 8.36% of the total user assets, Ethereum contributs 9.38% to the total reserves. 

In a statement, the crypto platform said that the PoR will provide reassurance to customers that ‘their funds and virtual digital assets remain safe, with enough liquidity to serve the customers’ withdrawal requests’.

The report was published in partnership with crypto research firm CoinGabbar.

Shaky Investor Confidence

Amid an ongoing upheaval in the crypto space, crypto exchanges have been witnessing a growing exodus of retail investors. The fleeing investors and withdrawals have led to the crash of many cryptocurrencies, which, in turn, have led to many exchanges going bankrupt, including behemoths FTX and Vauld.

This has shattered investor confidence and many investors have exited the space altogether. 

The aftermath also saw cryptocurrency exchanges move to protect their interests. Initially, many exchanges barred withdrawals to create a buffer and to prevent customers from liquidating their holdings in droves. Now, the exchanges have been releasing audited reports and PoR to assuage investors and build more trust in the ecosystem. 

Last month, CoinDCX also published its PoR, which pegged the exchange’s crypto assets at $157.93 Mn as on December 15, 2022 against liabilities of $155.30 Mn.

WazirX has ramped up focus on transparency after a turbulent 2022 when it was the face of multiple controversies that invited regulatory scrutiny. From questions over the ownership of its parent company to multiple raids in connection with foreign exchange violations, WazirX was in the eye of the storm all year long in 2022. 

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