WazirX reveals 40% customer assets held on third-party exchanges amid transparency push WazirX reveals 40% customer assets held on third-party exchanges amid transparency push
WazirX is seeking a third-party custodian that offers fund insurance.
2 min read
Updated: Oct. 25, 2024 at 7:37 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Indian crypto exchange WazirX has disclosed its proof-of-reserves (PoR) report, showing that over 40% of customer assets are stored on third-party exchanges, according to an Oct. 25 statement.
The exchange said its PoR dashboard aims to promote transparency by enabling independent verification of its wallet addresses, which include the precise holdings for each asset.
WazirX’s proof-of-reserve
As of Oct. 24, WazirX holds $298.17 million in 242,000 wallets. Of this amount, $157.01 million is held on-chain, $126.91 million is stored externally on other exchanges, and no assets are in third-party custody. Additionally, WazirX noted that it maintains $14.25 million in less liquid assets.
The embattled India-based exchange said it placed $98 million with “Exchange 1,” 26.81 million with “Exchange 2,” and $2.10 million with “Exchange 3.”
WazirX did not publicly name these platforms. However, the crypto community has speculated that these could be Bybit, KuCoin, and Huobi. WazriX co-founder Nischal Shetty stated:
“Weโre actively reaching out to the three exchanges where funds are held, asking for permission to display their names. If granted, weโll share them openly. If not, we respect their choice.”
Across chains, the exchange’s most valuable asset is 1140 BTC, equivalent to $77.9 million. This is followed by $26.7 million worth of crypto on the Tron blockchain, including $14.7 million worth of TRX and $1.6 million worth of Tether’s USDT stablecoin.
Third-party custodian
WazirX has announced plans to secure a new third-party custodian that offers fund insurance to bolster customer protection. While WazirX highlighted the importance of security, it also emphasized that fund insurance is becoming increasingly vital for risk management in digital asset custody.
The firm stated:
“Weโre trying to find a custody provider who can offer insurance for the funds so that loss is minimized, even in worst-case scenarios.”
In August, WazirX ended its relationship with its former third-party custody provider, Liminal, following the July cyberattack that resulted in a $235 million loss of client funds.
Following the breach, WazirX halted all withdrawals in crypto and Indian rupees (INR), affecting user access to funds. While INR withdrawals have since resumed, crypto withdrawals remain suspended as the platform consolidates its reserves and works toward restoring full access.
Meanwhile, WazirX is also intensifying efforts to recover the assets and prevent further breaches. The exchange is actively cooperating with the Financial Intelligence Unit and other government agencies in their ongoing investigation into the attack.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Tether
$1.00022
Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
WazirX
WazirX is an India-based cryptocurrency exchange with an advanced trading interface and features to Buy, Sell & Trade cryptocurrencies.
Bybit
Bybit is a cryptocurrency derivative trading platform established in March 2018 and registered in the BVI.
KuCoin
KuCoinโฏis a global cryptocurrency exchange for numerous digital assetsโฏand cryptocurrencies that launched in September 2017.
HTX
Huobi, a virtual asset exchange, launched a revised branding strategy on September 13, 2023, where “Huobi” will be rebranded as “HTX.” “H” stands for Huobi, “T” represents TRON with a commitment to being all in TRON, and “X” stands for the exchange.
Nischal Shetty is the founder and CEO of India’s leading cryptocurrency exchange WazirX.