Following the bankruptcy of FTX by trading volumes, Indian crypto exchanges claimed they are taking steps to restore investor confidence by making details of all of their reserve funds completely transparent.
The sharp decline in FTX's native FTT coin is thought to have affected roughly half a million crypto investors in India, who are now facing a devaluation of their invested capital of over 90 percent. Leading crypto asset exchanges CoinDCX, CoinSwitch, and WazirX, were quick to release statements regarding their sound balance sheets and assure customers that there was no impact of FTX's bankruptcy on their operations after realising the potential for widespread panic among Indian investors.
It started with Changpeng Zhao, the founder of Binance, who pledged to fulfil his promise to fully publish the proof of reserves he has on hand to cover any future consumer withdrawals. Notably, Binance was an investor for FTX and has pulled out of any ties with them post the FTX fiasco.
Now the co-founder at CoinDCX, Sumit Gupta, has already announced on Twitter that the crypto exchange would publish its proof of reserves by the fourth week of November after the collapse sent shockwaves across the crypto community. Meanwhile, Ashish Singhal, a cofounder of CoinSwitch, has already said that the company's crypto and fiat money holdings are greater than the entire amount held on its consumers' behalf.
Indian crypto exchanges have acknowledged the necessity for strong self-regulation and have thus far operated effectively, pending clarity on potential rules and regulations governing crypto assets in the nation. CoinDCX has restated its decision of not launching a native token like the FTT for FTX, while WazirX has reaffirmed that it works with one of the greatest custodial services in the world.
In actuality, due to their low exposure to FTX and the FTT token, Indian crypto exchange trade volumes were hardly impacted by the FTX trouble, which is a key factor. However, the impact of the recent crypto tax imposed by the Indian government and the wave of negative news engulfing the larger crypto community is highlighted by the fact that monthly trading volumes for almost all Indian crypto exchanges are less than 50 percent of what they were in January of this year.
Shashank is founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist.