Owing to a general demand for the verification of assets since the implosion of the FTX Derivative Exchange, Singapore-based cryptocurrency exchange Crypto.com has released the result of its proof of reserve study to the public. With the help of the result, users can ascertain that their assets are fully backed (1:1). Markedly, the verification was done by leading auditing firm Mazars Group.
“This independent third-party audited report performed under ISRS 4400 as set forth by the International Auditing and Assurance Standards Board (IAASB) used advanced cryptographic procedures to confirm the availability and backing of our customer balances,” a blog post stated.
To achieve this, Mazars Group made comparison between assets held in on-chain wallet addresses which were given to be controlled by the exchange with customers balance.
All these was done via an auditor-overseen live query of a production database. The result showed that each of the Crypto.com listed digital tokens has a reserve ratio of more than 100%.
The reserve ratio ranged from 101% for Ethereum (ETH), Ripple (XRP) and some others to 106% for Tether (USDT). A webpage where users can self-verify their assets has also been made available. Similarly, Seychelles-headquartered derivatives exchange BitMEX also allows its users to self-verify their assets.
Crypto.com Seeks to Promote Transparency with Report
However, Francine McKenna, a lecturer of Financial Accounting at the Wharton School at the University of Pennsylvania mentioned that this report is not an official audit.
He said that it is a “matching exercise based on information provided by the client about on-chain addresses of assets and a client database of customer balances.” McKenna went on to compare it to a Binance’s audit which was conducted by Mazars.
“It is no better than the Binance report, which is not surprising since it is the same firm and partner doing it.”
Kris Marszalek, the Chief Executive Officer (CEO) of Crypto.com pointed out, “Providing audited Proof of Reserves is an important step for the entire industry to increase transparency and begin the process of restoring trust. Crypto.com is fully committed to providing customers around the world a safe, secure, and compliant means of engaging with digital currencies.”
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