Indian crypto exchanges seek to reassure investors after FTX debacle
Indian crypto entrepreneurs said they are implementing measures to provide full transparency on their reserve funds to win back investor confidence after the collapse of FTX, the world’s third-largest crypto exchange by trading volumes.
After the collapse sent shockwaves across the crypto landscape, cofounder of CoinDCX Sumit Gupta took to Twitter to say that the crypto exchange will publish its proof of reserves by the fourth week of November. CoinSwitch’s cofounder Ashish Singhal has already declared that its crypto and fiat currency holdings exceeded the total amount held on behalf of its users.
The moves follow Binance founder Changpeng Zhao’s promise to disclose its proof of reserves in order to provide full transparency on the extent to which it can cover potential customer withdrawals. Binance, the world’s largest crypto exchange, was an investor in FTX and pulled out of a deal to acquire the exchange.
Pending clarity on possible cryptocurrency rules and regulations in India, crypto exchanges in the country have recognised the need for robust self-regulation and have performed well to date.
Investor confidence
In India, it is estimated that about half a million crypto investors have been impacted by the steep fall in FTX’s native FTT token and are staring at an over 90 percent depreciation of their invested capital.
Not only did Bitcoin and other major cryptocurrencies drop to their lowest price point for the year, the ensuing liquidity crisis also threatens to engulf more crypto firms and has frayed investor nerves even further.
Understanding the potential of large-scale panic among Indian investors, leading crypto exchanges CoinDCX, CoinSwitch and WazirX were quick to issue statements about their healthy balance sheets
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