IndiancryptoexchangeWazirXistakingnewstepstowardtransparencybyintroducingaProofofReserves(POR)system,followinga$230millionhackinJuly2024andrecentlarge-scalefundtransfers.Inarecentannouncement,WazirXfounderNischalShettyexplainedthePORprocess,whichaimstoprovideaclear,verifiableviewofthecompany’stokenholdings.
WazirXFounderDisclosesProof-of-ReservesPlan
ThelatestinitiativecomesasWazirXfacesscrutinyoveritsrecentmovementof$72.13millionworthofcryptoassetstorivalexchangeBybit.ShettyelaboratedonthePORsysteminapostonX,detailingthestepstheIndiancryptoexchangeistakingtoenhancetransparency.
Henotedthat,afterfilingafourthaffidavitandsharingwalletaddresses,thenextstepinvolvescreatingaconsolidatedviewoftheexchange’stokenholdings.“Thismeanscreatingapagewherewepulldatafromvariouswalletsanddisplaythebalancesforeveryonetosee,”Shettystated.
AboutPOR:
Nowthataffidavit4isfiledandwehaveprovidedallthewalletaddresses,thenextstepistodisplayaconsolidatedviewofalltokenholdings.
Thismeanscreatingapagewherewepulldatafromvariouswalletsanddisplaythebalancesforeveryonetosee.Our…
—Nischal(Shardeum)🔼(@NischalShetty)October21,2024
TheprocessiscomplicatedbyWazirX’slargenumberofwallets,withover240,000unsweptwalletaddressesthatcontainrelativelysmallbalances.Shettyacknowledgedthedifficultyinmanagingtheseaccountsbutoutlinedtheplantoinitiallyshowtotalbalancesfortheseaddressestokeeptheinformationmanageable.
AccordingtoShetty,theProofofReserveswillbecategorizedintothreedistinctsections:coldwallets,third-partycustody,andthe240,000+unsweptbalances.Thesecondcategory,third-partycustody,remainsparticularlydynamic,withchallengessurroundinglegalandcompliancerequirementsfornewcustodyproviders.
“Duringthisinterimperiod,balanceswillbeheldonexchangesthatsupportthesetokens,”Shettyadded.Healsonotedthatwhilediscussionswithfivecustodyprovidershavetakenplace,noneofthemcurrentlysupportallthetokensheldbytheIndianexchange.
UproarAroundMassiveTransfers
TheintroductionofthePORsystemcoincideswithrevelationsthatWazirXtransferred$72.13millionworthofcryptototheBybitexchange.ThisfundmovementwasidentifiedthroughapublicdashboardcreatedbytheteamatCoinSwitch,aplatformthathasbecomeinvolvedinanalyzingWazirX’srecentwalletdisclosures.
InadditiontothetransfertoBybit,approximately$1.5millionwasalsosenttoKuCoin.Thesetransfershaveraisedquestionsabouttheexchange’sfundmanagementpractices,particularlyinlightoftheJulyhack.Thecompromisedexchangehasmadeover240,000walletaddressespublicaspartofanaffidavitfiledwiththeHighCourtofSingapore,followingthecyberattack.
However,thevolumeofdisclosedaddresseshasprovendifficultformanyuserstoanalyze,promptingCoinSwitchtostepinwithitspublicdashboard.Thedashboard,developedbyCoinSwitch’steam,aimstosimplifytheinterpretationofthecomplexdatasetreleasedbyWazirX.AshishSinghal,co-founderofPeepalCo,sharedthetoolwiththepublictoassistinvestorsinnavigatingthesituation.
CoinSwitch’sinvolvementinthematterisnotwithoutitsowninterests.ThecompanyhasdepositswithWazirXthatitclaimswereillegallyfrozen,leadingCoinSwitchtopursuelegalactionagainstWazirXinanattempttorecoveritsfunds.Hence,thelatestPORdashboardcouldcomeinhandytoresolvethisdisputeandgainbackusertrustiftheexchangeexecutesthemoveproperly.
cryptonewsz.com