CoinSwitch Publishes Fourth Edition of Proof of Reserves

We publish our proof of reserves every year. This year, we’re publishing it for the second time. As you may recall, when the crypto exchange WazirX allegedly faced a cyber attack, a small percentage of our funds were also stuck on the exchange. To make sure that our user funds are safe, we used our own treasury and ensured that we maintain a 1:1 ratio between user holdings and CoinSwitch holdings. We had disclosed all the details at the time in a blog post here. To provide additional transparency, we are publishing the proof of reserves for the second time this year.

As you know, the proof of reserves is a snapshot of our holdings, verified by a reputed third-party audit firm. This snapshot, taken on Sep 30, 2024, reaffirms that CoinSwitch holds sufficient cryptos and INR balances to cover all user redemptions, maintaining a ratio of 1:1 or higher.

Just like in the past editions, this independent verification of our crypto and INR holdings was conducted by a qualified chartered accountancy firm as per the standards prescribed by the Institute of Chartered Accountants of India (SRS 4400).

The review covered two CoinSwitch entities: Bitcipher Labs LLP and Nextgendev Solutions Private Limited.

Key Findings

The key finding of the review is that CoinSwitch’s total holdings are greater than its users’ holdings (numbers as on Sep 30, 2024, 24:00 hrs IST).

Total Customer Holdings (Crypto + INR): INR 1952.81 crore
Total CoinSwitch Holdings (Crypto + INR): INR 2514.91 crore

This means CoinSwitch maintains a holdings ratio of over 1:1 for both crypto and INR balances, ensuring all users can fully redeem their cryptos at any time, even in extreme scenarios.

The higher ratio is attributed to CoinSwitch’s own assets held separately from user funds. The assets held by PeepalCo, the parent brand of CoinSwitch, are in addition to funds shown as part of POR.

The total value of customer holdings with CoinSwitch as of 30 Sep 2024 has shrunk by about 30% as compared to the previous edition of the POR. This can be attributed to the drop in crypto prices from March 31, 2024 (date of previous POR) to 30 Sep 2024 (date of current POR). The dip in INR holdings is primarily due to two reasons. Firstly, as explained earlier, we used funds from our treasury to replenish user crypto following the alleged cyber attack on WazirX. Secondly, as crypto prices have fallen, users have started using their INR balance to buy more crypto on CoinSwitch.

The higher ratio is maintained for Virtual Digital Assets (VDA or crypto) separately as well.

Total Customer Crypto Holdings: INR 1880.84 crore
Total CoinSwitch Crypto Holdings: INR 2245.91 crore

Transparency and Verifiability

Given what has happened in the crypto industry recently, we need to be more transparent and accountable to our users. At CoinSwitch, safeguarding our users’ funds is not just a responsibility—it’s the core of everything we do. We understand the trust our users place in us when they invest and trade on our platform, and we take that trust seriously.

To enable users to independently verify the findings, CoinSwitch has made public an updated list of its major crypto wallet addresses. The addresses of our major wallets are provided below (cut-off date: 22 Oct 2024). CoinSwitch reiterates that it does not reinvest or leverage users’ assets, which are held separately from the company’s funds solely to simplify the crypto experience for Indian users.

As shown in the diagram above, CoinSwitch holds over 95% of cryptos within its ecosystem of custodial wallets and our own exchange (CoinSwitchX). Some cryptos (less than 5%) are held on partner exchanges to make trading experience for our users simpler.

List of Crypto Wallets

The addresses of our major wallets are provided below.

Downloads

You can download past editions of our proof of reserves below.

Proof of Reserves (Fourth Edition – PDF)
Proof of Reserves (Third Edition)
Proof of Reserves (Second Edition)
Proof of Reserves (First Edition)