The 400 Million Dollar Mistake

The 400 Million Dollar Mistake
The 400 Million Dollar Mistake

Crypto.com, which bought the brand rights along with its peers, is also under pressure following the collapse of FTX. This week, attention has focused on Crypto.com CEO Kris Marszalek, who had to admit over the weekend that his company had inadvertently sent $400 million worth of Ethereum to an address owned by rival exchange Gate.io.

“It was supposed to be moved to a new cold storage address, but was sent to an external exchange address that was whitelisted,” Marszalek tweeted over the weekend. The money was later “returned to our cold storage after working with [Gate] staff.”

This is a bad admission that has already shaken the already shaken cryptocurrency exchange business. Last week, Crypto.com's own coin, Cronos, has lost nearly 40% of its value. According to Coindesk, the exchange's daily volume has dropped from its recent high of $4 billion to just $284 million.

Crypto.com's senior executives are currently trying to appease investors and minimize the damage.

The situation got so bad that Marszalek himself intervened, claiming that the criticism of the upcoming transfers was nothing more than “FUD” or “fear, uncertainty and doubt”, a phrase used by crypto enthusiasts to describe the deliberate planting of doubt for monetary gain. had to.

This incident clearly shows that investors were affected by last week's bankruptcy of cryptocurrency exchange FTX, which was once led by controversial CEO Sam Bankman-Fried.

After it was revealed that Bankman-Fried made some serious accounting errors and was unable to reimburse consumers due to a “liquidity shortage”, FTX collapsed like a card of cards.

The latest incident involving Crypto.com and its CEO will not be a repeat of it, according to experts.

According to Owen Rapaport, co-founder and CEO of Argus, “To its credit, Crypto.com continues to have the cash to cover these withdrawals, adding further confidence to its CEO's claims that its assets are backed 1:1.”

According to the source, Marszalek also stated that his business will release an audited "proof of reserve" within the next month.

While Marszalek claimed in a YouTube interview that his exchange's exposure to FTX was limited to $1 million after closing a previous $10 billion deal, Crypto.com has also made an active effort to get itself out of the FTX dumpster fire.

“We got $990 million back from FTX.

Shiba Inu coins also make up 20% of Crypto.com's reserves; According to Marszalek, this is exactly what his customers want to trade.

To put it mildly, the past week has been turbulent for bitcoin exchanges. Investors were undoubtedly affected by the uncertainty brought by the collapse of FTX and began to question the reliability of some of the largest exchanges in existence.

Source: futurism

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