90% of WazirX's User Assets Are in Binance Wallets, According to Proof-of-Reserves Report

"We are not only India's largest crypto exchange by volume but also India’s largest crypto cxchange by reserves," a WazirX blog post said.

AccessTimeIconJan 11, 2023 at 9:09 a.m. UTC
Updated Jan 11, 2023 at 5:19 p.m. UTC

Indian crypto exchange WazirX released its proof-of-reserves report, and with that disclosed that 90% of its user assets are held in Binance wallets.

CoinGabbar, a third-party platform that tracks crypto assets, released WazirX's proof of reserves. At the time of writing, WazirX had $285 million of total user assets, displayed in the form of stablecoin USDT, which is pegged to the U.S. dollar. Of the total user assets, around 92%, or $259.07 million, was held in Binance wallets, with $26.45 million being held in other exchanges.

"The total assets held by WazirX are greater than the assets held by WazirX on behalf of its users," a WazirX blog post said. "With this, we are not only India’s largest crypto exchange by volume but also India’s largest crypto Exchange by reserves."

"90% of user assets are held in wallets at Binance, and the balance of 10% is stored in hot and warm wallets," WazirX added.

The revelation is significant because in August WazirX co-founder Nischal Shetty and Binance CEO Changpeng Zhao had a public Twitter spat about who controls WazirX.

"While the user assets may be on Binance wallets, WazirX has the API (application programming interface) which gives us control of the tokens," said Rajagopal Menon, vice president of WazirX.

Shetty has previously said that his team has been in discussions with Binance for several months to work out the ownership issue.

"The holdings at Binance Sub-Accounts belong to WazirX only but kept with Binance," said Sudeep Saxena, co-founder of CoinGabbar. "The validity of these holdings depend upon Binance honoring the liquidation of the same. The same holds good for other exchanges including CoinDCX and SunCrypto, for which we have integrated the proof of reserve."

Binance said it does not control its users' operations and assets and therefore is unable to verify the percentage of any of their users' assets on wallets on Binance, but users of Binance can be assured it has funds covering all users' assets 1:1.

"Binance is trusted to provide wallet services as a tech solution to many users," said a Binance spokesperson. "These users, including Zanmai (the Indian entity of WazirX's Singapore parent) who uses our wallet services for WazirX's operations, are in control of and responsible for the operations of their Binance accounts."

At the time of writing, more than 19% of the WazirX user funds, the highest amount of a single token, was in the form of shiba inu (SHIB), with ether (ETH) and bitcoin (BTC) holdings at 9.37% and 8.28%, respectively.

Several of India's most prominent crypto trading platforms have released proof-of-reserve reports now but in the days after the FTX collapse most had either declined to comment or didn't respond to requests for comments when asked if they would publicly publish their fund reserves or do a "Merkle tree" proof of reserves.

UPDATE (Jan 11., 11:57 UTC): Adds response from Binance spokesperson.


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Amitoj Singh

Amitoj Singh is a CoinDesk reporter.