WazirX’s Proof-of-Reserves Report Reveals 40% of Customer Assets Held on Third-Party Exchanges

Indian crypto exchange WazirX has recently released its proof-of-reserves report, shedding light on the distribution of customer assets and its efforts to enhance transparency and security measures.

According to the report, WazirX holds a total of $298.17 million in 242,000 wallets as of Oct. 24. Of this amount, $157.01 million is held on-chain, $126.91 million is stored on third-party exchanges, and no assets are in third-party custody. Additionally, the exchange maintains $14.25 million in less liquid assets.

WazirX has disclosed that it has placed funds with three external exchanges, referred to as “Exchange 1,” “Exchange 2,” and “Exchange 3.” While the platforms were not named publicly, speculation within the crypto community suggests they could be Bybit, KuCoin, and Huobi. Co-founder Nischal Shetty stated that they are seeking permission from these exchanges to reveal their names for further transparency.

The exchange’s most valuable asset across chains is 1140 BTC, equivalent to $77.9 million, followed by $26.7 million worth of crypto on the Tron blockchain. WazirX is also in the process of securing a new third-party custodian that offers fund insurance to enhance customer protection, following the termination of its previous custodian relationship with Liminal after a cyberattack in July resulted in a significant loss of client funds.

While INR withdrawals have resumed, crypto withdrawals remain suspended as WazirX works on consolidating its reserves and restoring full access for users. The exchange is actively collaborating with government agencies to investigate the attack and prevent future breaches.

Overall, WazirX’s disclosure of its proof-of-reserves report and its commitment to enhancing security measures and transparency demonstrate its dedication to safeguarding customer assets and maintaining trust within the crypto community.