After the collapse of Terra, which devastated many Indian cryptocurrency investors and the failure of hedge funds such as Celsius and Three Arrows Capital, the
The FTX fiasco is the most recent shocking development impact the cryptocurrency market.
What worries Indian crypto investors is the fact that Indian exchanges are also private, do not share financial information with users and their revenues have collapsed since the government adopted an aggressive tax policy to cryptography.
“At a time when major global exchanges are under the spotlight, Indian exchanges should also demonstrate transparency and provide proof that they are sustainable businesses,” said Vishal Gupta, a Noida-based crypto investor. .
Ashish Singhal, co-founder and CEO of CoinSwitch, India’s largest crypto investment platform, said his company has no exposure to FTX and its token, FTT.
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“We hold users’ crypto assets in a 1:1 ratio. This means that funds are available for our users to trade around the clock. We have no leverage on users’ crypto. We have a simple trading model based on trading fees and commissions. We earn commissions on transactions. We do not reinvest user crypto in any form or manner,” he said.
Singhal added that the exchange uses the world’s best custody services in terms of security, has fully audited finances and has a “risk meter” on Solana (SOL), a feature that warns about highly volatile coins or when the company believes that users should proceed with caution when investing.
Solana is one of the tokens exposed to FTX founder Sam Bankman-Fried and his companies, Alameda Research and FTX.
Sumit Gupta, CEO and co-founder of CoinDCX, said his company has never exposed user funds to price or credit risk.
“We do not lend or take any action with our users’ assets without their prior consent. This means that all customers can access their funds at any time. Second, at CoinDCX, we have made a conscious decision not to having a native token. This helps protect our users from the risks of making the native exchange token a larger part of their wallet. Third, risk management and continuous auditing are an integral part of our system,” said he declared.
Gupta added that CoinDCX wallets are state-of-the-art and have multi-party computation (MPC), which means transfers can only take place if authenticated by the users themselves.
Smaller crypto startups also say they have made adequate provisions for consumer protection.
Khaleelulla Baig, co-founder and CEO of thematic investment platform Koinbasket, said that since day zero, their policy has been not to take custody of client funds and assets, and they seek no trading rights. on behalf of users.
“We believe in giving users full control over their accounts, funds and assets. Also, all crypto basket algorithms avoid choosing crypto projects that primarily rely on leverage and collateral as their primary trading activities. So far, we have only integrated global regulated exchanges like Coinbase,” he said.
After the collapse of FTX, major crypto exchanges such as Binance, Crypto.com, and Kucoin etc. conducted reviews of the total value of their reserves. Crypto.com’s initial audit revealed that 20% of its assets are in the same Shiba Inu coin. And in another emerging sign of distress in the ecosystem, crypto lender BlockFi has once again halted withdrawals.