Crypto platform CoinSwitch releases second proof of reserves data

CoinSwitch said that its cash and cash equivalent balances are 6.79 times higher than the balance of its users

Cryptocurrency investing platform CoinSwitch on Thursday announced its second proof of reserves (PoR) data. The company, as of March 31, has total holdings of Rs 1,944.8 crore. This is higher than the total user holdings of Rs 1,431.3 crore.

A holdings ratio of 1:1 or higher means that the platform holds enough balance to allow users to redeem their investments at any time.

CoinSwitch, in a statement, said that its cash and cash equivalent balances are 6.79 times higher than the balance of its users. "The higher ration is on account of CoinSwitch's own Rs balances," it added.

The company released its first PoR last year stating that the total holdings are greater than the total user's holdings. But the numbers were not revealed.

"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 (CEO), CoinSwitch.

The review was carried out as per the standards prescribed by the Institute of Chartered Accountants of India (SRS 4400) on March 31, 2023.

"As far as asset holdings are concerned, as a best practice, we hold nearly 85 per cent of the crypto assets on custodial wallets, only the remaining is held on the exchanges to execute fast trades. The custodial wallets we use are provided by institutions of international repute, and access to these wallets is stringently managed through multi-party computation," it said in a blog post.

As of July 26, the assets held in the wallets were around Rs 1,174.73 crore. The remaining Rs 244.62 crore were held on exchanges.

The announcement comes at a time when several stakeholders of the Indian crypto industry are in discussions with the Centre to decide on ways to regulate the industry under the G20 presidency.