WazirX reveals proof of reserves; 90% funds are in Binance wallets

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Key Takeaways:

  • WazirX announced that it is India’s largest exchange and published proof of reserves.
  • A third-party platform for tracking crypto assets, Coin Gabbar, has WazirX’s proof of reserves available.

Major digital-asset service providers started disclosing their reserve money following the unrest and mistrust that the FTX liquidity and insolvency controversy produced in the cryptocurrency market.

WazirX’s proof of reserves was published by CoinGabbar, a third-party portal that tracks cryptocurrency holdings. WazirX had $285 million in total user assets as of the time of writing, which was represented by the stablecoin USDT, which is linked to the dollar. 

The Indian cryptocurrency exchange WazirX is the most recent to follow the proof of reserve trend. On January 11, it declared its act of openness, saying:

“The total assets held by WazirX are greater than the assets held by WazirX on behalf of its users. With this, we are not only India’s largest crypto exchange by volume but also India’s largest crypto exchange by reserves.”

90% of user assets on WazirX are being housed in Binance-based wallets, with the other 10% being maintained in both hot and cold storage wallets, according to the statement. This is nearly equivalent to $28.5 million and $256.5 million, respectively. WazirX declared:

“90% of user assets are held in wallets at Binance, and the balance of 10% is stored in hot and warm wallets,” 

Because of Binance‘s “strict protocols and industry-leading technical measures” for protecting customer cash on its platform, the exchange claimed it made this decision. Additionally, it guaranteed consumers a ratio greater than 1:1 to safeguard user cash in the event of liquidation.

Shiba Inu now makes up over 19% of the exchange’s holdings, which are followed by Ether (9.37%), Bitcoin (8.28%), and DogeCoin (8.18%).

Even though WazirX is India’s biggest exchange, it has already been into trouble with local authorities over allegations of money laundering. During the inquiry, funds on the exchange were frozen for slightly over a month.

During this moment, CEO Changpeng Zhao of Binance openly dissociated the company from the exchange in a tweet by stating that Binance does not control the exchange. Binance furthered its support for local law enforcement during the inquiry by banning off-chain financial transactions via WazirX.

Following the FTX crisis, Binance was the first exchange to unveil its proof of reserve system, prompting other exchanges to follow suit.

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