Revix, the Cape Town-based investment platform backed by Sabvest and partnering with Mazars, has obtained an independent, verified audit to prove that customer funds are properly held.

The company believes that the Proof of Reserves report released by Mazars on 1 October makes Revix the first cryptocurrency service provider in South Africa to verify independently that it holds all of its customers’ cryptocurrencies.

Customer funds held on crypto platforms, which include cryptocurrencies and traditional currencies such as rands and dollars, are legally owned by the platform’s customers but are looked after, or “custodied”, by the crypto platform itself.

Several South African governing bodies joined together in 2017 to form the Intergovernmental Fintech Working Group (IFWG), which aims to formulate a collective policy position on cryptocurrencies and the financial service providers facilitating the crypto market in South Africa.

Its members include the Financial Sector Conduct Authority (FSCA), the National Credit Regulator (NCR), the South African Reserve Bank (SARB), the Financial Intelligence Centre (FIC), the South African Revenue Service (SARS) as well as the Competition Commission.

The IFWG believes that crypto assets cannot remain outside of the South African regulatory purview, and that South Africa needs to employ a staged approach to bring crypto assets within the regulatory remit through the regulation of crypto asset service providers (CASPs).

Regulations are yet to be published, although in June 2021 the IFWG outlined how cryptocurrencies could be regulated in South Africa. There is still no clarity on enforcing oversight of securing customer funds for crypto platforms.

“As innovative fintechs like Revix create the next generation of financial products, Mazars knows that auditing and proof-of-reserve tools must keep up with the pace of innovation,” says Wiehann Olivier, audit partner and digital asset lead at Mazars South Africa.

“The proof of reserve report was designed to give users of various digital asset platforms the needed reassurance in the current unregulated industry and therefore will be a fundamental advantage to stakeholders. We are optimistic that the trend of proof of reserve reporting will be followed by other South African and International virtual asset service providers like Revix to add to the credibility of the industry as well as ensuring a safer investment environment.”

Sean Sanders, CEO and founder of Revix, comments: “This is a big step forward in the South African crypto landscape as we hope to set the standard for other crypto platforms. The security measures and risk management procedures that crypto platforms implement to protect their customers’ cryptocurrency holdings are the most important areas which regulators seem to be missing. This independent report from a top accounting and auditing firm is a step forward in further developing the cryptocurrency industry in South Africa.”

In the long run, those companies which provide their customers with the necessary transparency, security and peace of mind, will win, according to Sanders.

“We’re proud to submit this overview of our process to the global cryptocurrency community. We believe that the crypto industry is capable of providing a level of assurance and accountability that surpasses the traditional financial services industry, and we aim to lead the charge toward optimal transparency,” he says.