Indian Crypto Companies’ Response to the FTX Collapse

The quick downfall of FTX with an $8-10 billion deficit in its balance sheet has left the broader cryptocurrency market reeling under its cascading effects.

Besides Proof of Reserves (PoR) and Reserves to Liability (R2L) Ratio data, Indian crypto exchanges, battling low volume caused by high taxation and an unfriendly regulatory environment, have responded to the evolving situation with some fresh initiatives.

Polygon CEO’s Self-Custody Buzz

Polygon CEO Sandeep Nailwal was the first to moot the idea of self-custody, which turned out to be the new benchmark of transparency and financial health in the crypto industry. In a 5-tweet thread on November 12, he blamed ignoring core fundamentals for the FTX’s collapse.

In particular, he referred to the failure to stick to self-custody of assets, saying adhering to this norm has helped Polygon “come out safe from all this chaos.”

Nailwal claimed neither Polygon nor any of its subsidiaries ever opened an account with FTX and went on to reveal that, on the contrary, FTX Ventures bought $50 million worth of MATIC early this year. Polygon is a Mumbai-based startup registered in the British Virgin Islands.

CoinSwitch’s Multi-Exchange Trading Platform

Indian crypto exchanges have responded to the emerging situation with enhanced PR activities and some noteworthy initiatives. For example, CoinSwitch has launched a first-of-its-kind multi-exchange trading platform – CoinSwitch Pro.

“The first-of-its-kind KYC-compliant platform will allow users to trade Crypto assets in Indian Rupees across multiple exchanges with a single login,” the exchange said in a PR recently.

Its key features include single login, arbitrage advantages, and a unified portfolio across platforms.

CoinDCX Releases PoR, R2L Data

CoinDCX, the highest-valued Indian crypto exchange, has released the list of its on-chain and off-chain balance of assets in a Proof-of-Reserves (PoR) exercise. In a PR, the company outlined plans to provide monthly updates on the Reserves to Liability (R2L) ratio, with the information already shared last week for the top 10 assets.

“We have the highest levels of corporate governance and have always maintained a user liability to assets ratio greater than 1:1,” CoinDCX said in its release.

Saga of FTX’s Downfall

On November 7, CryptoPotato reported that FTX’s utility token FTT had dropped 10% in 24 hours after Binance said it will offload its entire holding worth nearly $580 million quickly after a sudden announcement by its CEO Changpeng Zhao on Twitter over the weekend.

By November 10, FTX had fallen from its ivory tower and admitted to an $8-billion mismatch between assets and liabilities and hoped Binance will take over the beleaguered crypto derivative exchange and its trading platform, Alameda Research, which didn’t materialize.

The domino effect had begun, and Samuel Bankman-Fried filed for bankruptcy for FTX, FTX US, Alameda Research, and countless other affiliate companies.