As part of our commitment to strengthen our risk and compliance structures, we continually look for ways to affirm our liquidity. To that end, we engaged a renowned consulting firm, INMACS, to study our processes, review the crypto and INR held by us including what we hold on behalf of our users, and arrive at a finding based on certain Agreed Upon Procedures (AUP).
The firm began their research in July 2022 to confirm whether our total holdings of crypto and INR are greater than or equal to the cryptos and INR that we hold on behalf of our users. Before we get to the procedures and the findings of the report, here’s some background on INMACS.
INMACS is a 38-year-old public limited company registered in India, that specializes in assurance, taxation, regulatory advisory, and risk management, among other services. The firm was founded by Mr. Vinod Jain, an experienced Chartered Accountant with 42 years of rich industry experience, who has also been a Member of the High Powered Committee, appointed by the Finance Ministry to simplify Income Tax Law. He was also appointed by the Union Finance Minister as an Advisor to the GST Council for reviewing GST Law. He has been elected member of National Council of CII and a former National President of ANMI (Association Of National Stock Exchanges members of India). Mr. Vinod Jain has also been a member of the apex body, Central council of the Institute of Chartered Accountants of India for 12 years. He served as an independent director and was the Chairman of the audit committee of Coal India, and has also served on different committees of CBDT, MCA and SEBI.
The Agreed Upon Procedures is a specialized professional process wherein a firm is required to perform specific tests and process and issue reports thereupon based on factual findings. The Agreed Upon Procedures executed by INMACS are under Indian Standards on Related Services (SRS 4400) issued by the Institute of Chartered Accountants of India, compatible with International Standard (ISRS) 4400.
The report confirms that as of November 4, 2022, the total CoinSwitch holdings are greater than total user’s holdings. That is, the total INR and Crypto holdings held by CoinSwitch are greater than the Crypto and INR held by CoinSwitch on behalf of its users.
1. INMACS was provided with a detailed listing of crypto custody services, counter-party sources including crypto exchanges and wallet addresses from CoinSwitch, using a snapshot of web-logins on the web-portal of these sources provided by CoinSwitch.
2. INMACS obtained individual Indian fiat currency (INR) balances with banks, payment gateways, and crypto exchanges, using snapshot of web-logins on the web-portal of these sources or banks, and payment gateways, and crypto exchanges statements of account provided by CoinSwitch.
3. INMACS also obtained a detailed listing of customer holdings with CoinSwitch in Virtual Digital Assets (VDA) directly from CoinSwitch’s database.
4. It then compared the total CoinSwitch’s crypto and INR holdings with customers’ crypto and INR holdings with CoinSwitch to understand whether total CoinSwitch holdings were greater or equal to or less than customer holdings.
What it means for you
The independent third party firm's report confirms that CoinSwitch’s overall holdings of crypto and fiat balances in INR are higher than those of customer’s holdings of crypto and INR balances on CoinSwitch platform. This means, you can be assured that you can, at any point in time, sell your cryptos and withdraw your INR balance into your CoinSwitch account. We have not used your crypto and INR balance for any lending or borrowing purposes.
This is an initiative by CoinSwitch to build trust and transparency for the crypto industry. We will continue to take similar verification measures to reaffirm your faith in us, as we continue to build the crypto ecosystem for India.
This initiative is a pioneering step in the era of transparency and ethical reporting by Crypto platforms, and a first of its kind in India.
This document / report is solely for information purposes, and is not intended to provide any legal, tax, accounting, or investment advice or recommendations. Users are strongly advised to do their own research (DYOR) before buying, selling, or storing any Crypto or INR on any Crypto platform. Crypto assets and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Your usage of the CoinSwitch platform shall remain subject to various terms and policies as available on www.coinswitch.co.