Blockchain Australia is the peak industry body in Australia representing members of the blockchain and digital assets community. Our members include leading Australian digital currency exchanges, who have come together to make the below statement together with Blockchain Australia, to show that we speak up and stand united for the highest standards to protect users.
We welcome the Treasury’s move to open consultations to safeguard crypto custody arrangements and regulate exchanges next year.
In the interim, to demonstrate our digital currency exchange members’ continuing commitment to transparency and consumer protection, we the undersigned digital currency exchanges each severally declare and affirm the following:-
- Customer balances are held on a 1:1 basis
Customer balances are held on a 1:1 basis and are denominated in the client’s currency. Therefore, the digital currency exchange member does not trade its customer balances.
- Customer balances are held in 100% full reserve
Customer balances are held in 100% full reserve and the digital currency exchange is not susceptible to running out of liquid funds for withdrawals. Additionally, the digital currency held is not on-lent to any other party.
- Ongoing proofs of the above, will be provided through:
a. Annual financial audits, followed by quarterly or monthly self attestations;
b. Onchain proofs;
c. Or a combination of the above.
Caleb & Brown
*As a public company with audited financials, Coinbase already has the traditional approach in place. Our financials are subject to quarterly external auditor review, and we also file annual audited financial statements with the SEC https://investor.coinbase.com/financials/sec-filings/default.aspx These traditional finance audits confirm that we hold customer assets 1:1. Starting in the second quarter of this year (with the effectiveness of SAB 121), we were also required to account for crypto assets held for our customers as liabilities and assets explicitly on our balance sheet.
# These exchanges do not hold digital currencies on behalf of their customers as they are non-custodial, but these exchanges otherwise support this statement
The ‘Blockchain Australia Digital Currency Exchange Members Affirmation’ is dynamic and updated when others join.
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