Nischal says WazirX finding it difficult to work with any exchange

WazirX co-founder Nischal Shetty claimed that his exchange management is having trouble finding a custody provider (another exchange) to store all of their remaining crypto funds, post the Rs 2000 crore hack.

Shetty also announced the exchange’s plans for implementing Proof of Reserves (POR) where funds in three parts (Cold Wallets, Third Party Providers and over 240,000 user wallets) will be revealed.

The Crypto Times reported that as per industry insiders, the WazirX management is finding it difficult to convince any exchange provider to let them store their remaining 55% of customer funds, due to loss of reputation. 

However, Shetty claimed in his tweet on X that he contact five custody providers till now and none of them was found to be collecting all the crypto tokens WazirX has. 

The Crypto Times had reported that WazirX recently transferred funds worth Rs 606 crore to an unregistered exchange ByBit owned by a Chinese national, without informing users. 

Additionally, Users were also not informed about any plans for implementing POR during previous town halls or through official communications. The lack of prior notice has raised questions about the exchange’s transparency and trustworthiness.

What is WazirX Proof of Reserve (PoR) plan?

As per the post from Shetty, this initiative aims to create a consolidated view of token holdings, allowing users to easily track wallet balances.

Shetty emphasized the team’s commitment to transparency, stating they would start with total balances for over 240,000 unswept wallets before moving to more detailed disclosures

Shetty acknowledged the challenges in managing data from the various wallet categories, including cold wallets and third-party custody. 

He highlighted that Category of Third Party Service Providers is especially fluid, with ongoing discussions regarding the requirements, legal aspects, and compliance work for new custody providers. In the meantime, balances will be maintained on exchanges that support these tokens.