9 Oct, 2019

Indian Crypto Exchanges Remain Silent on Proof of Keys

Indian exchanges crypto, except for Coindelta, have not responded to Proof of Keys movement. This raises concerns regarding the well-being of Indian exchanges.

Either something is wrong at Indian exchanges, or they’re not caring enough about the ongoing Proof of Keys movement. About 2 days have passed since the beginning of Proof of Keys movement on 10th anniversary of Bitcoin, but majority of exchanges have remained completely silent about their take on this movement. Moreover, all of them have also not responded to a query asking them to reveal at least the public addresses of their hot and cold wallets, which would allow the world to see what’re they holding.

The Proof of Keys movement was started on 10th anniversary of Bitcoin with one simple goal: to confirm that the exchanges and other third party services are actually holding the Bitcoins on behalf of their users. To ensure that the Bitcoins left by users in the wallets of exchanges have not been lent to someone or used by the exchanges themselves. Users taking part in the movement would request a withdrawal of their holdings from exchanges and other third party services. The idea is to see that if all (or at least a majority) users of an exchange withdraw their Bitcoins at the same time whether the exchange will be able to process those withdrawal requests or not. Exchanges that fail to comply with requests are meant to be scrutinized by the community for breaching the trust of users, and the movement has already claimed a high-profile victim called HitBTC.

Now, the Indian exchanges have remained stunningly silent about this movement. They didn’t even bother to respond to a tweet asking them to reveal their wallet addresses. You can see the tweet below:

Indian exchanges should share their hot/cold wallet address for transparency.

Sharing these details bring in more user trust. Hope we get response from tagged exchanges. @koinexindia @bitbns @WazirXIndia @Unocoin @coindelta_ @coindcx @giottus

As of now only one exchange has cleared its stance on this movement, and that is Coindelta. The company said from their official Twitter account:

“Coindelta’s stand on “Proof of Keys” movement!

Here is our public statement, until we can come up with any method via which we can make the information public without providing any confidential information.

  1. We declare that our crypto holdings are always higher than the total user holdings! Total Users Holdings  < Total holdings in our BTC wallets, SUM(users balances) < SUM(balances on BTC addresses)(There are 100k+ addresses)
  2. If all users withdraw funds at the same time, we will be able to process those within 2-4 days. (As this involves the movement of funds from cold wallets to the hot wallets and it is a 4-step secure process within the organization)
  3. There is no direct way for users to verify this, as we cannot declare the individual user holdings (for the privacy of the users)
  4. We support the drive that every user has a right to know the security status of their funds.”

In addition to this self-declaration Coindelta’s CEO Rajdeep Singh also said that he is of the view that non-tech users can lose their money in such movements. You can see his tweet below:

I strongly feel that a lot of non-tech people can loose their funds in such movements.
I would recommend users to first start using private wallets on the test networks to see if they can protect their private keys for long time!#ProofOfKeys #BTC https://t.co/u7AsOd1otv

— Rajdeep Singh (@rajdeep225) January 5, 2019

As you can see, it’s a self-declaration. Other exchanges, however, have not come ahead with a self-declaration even. We’ll update the story if any of them responds!