Barely digesting the shock of FTX, the next thriller is on the horizon around Crypto.com. It’s not just a $400 million chance transaction that raises questions. The transfer of $260 million worth of stablecoins just before Crypto.com announced its reserves also raises doubts about the liquidity of the crypto exchange. The official side is satisfied.
In response to the FTX crash, Crypto.com has also announced this in addition to Binance to disclose their reservations. CEO Kris Marszalek spoke of “full transparency”. It should be “necessary for crypto platforms to publicly share evidence of reserves”. According to LookonChain however, there is a need for clarification.
Accordingly, Crypto.com has assets worth approximately $2.7 billion. According to the blockchain analysts, 20 percent of that consists of Shiba Inu tokens: $ 531 million. After bitcoin ($857 million), memecoin occupies the largest position in reserves, ahead of ether ($446 million).
In addition, there is a not insignificant share of the company’s own exchange token Cronos (CRO). The exchange is said to have around 1.2 billion CRO tokens ($80 million) in reserve. According to Lookonchain, about 40 percent of reserves are “low liquidity assets” – assets that only guarantee low liquidity.
Report raises questions
Crypto.com is also said to have transferred $260 million in stablecoins, possibly to boost its own reserves. “We found that Crypto.com has drained a total of $210 million in USDT from Binance and $50 million in USDC from Circle,” said Lookonchain. The money was transferred shortly before CEO Kris Marszalek announced the reserves disclosure. A timing that Lookonchain notes as “very strange”.
Therefore, the blockchain analysts advise investors: “If you have money on Crypto.com, please take care of the safety of your money”. Comparable said Binance CEO Changpeng Zhao: “If an exchange has to move large amounts of cryptocurrencies before or after they show their wallet addresses, that is a clear sign of trouble. Stay out”.
Accidentally transferred $400 million?
Tracking wallet movements also revealed that Crypto.com sent 320,000 ether, the equivalent of $400 million, to rival trading platform Gate.io as early as October 21. Apparently by accident: “It was supposed to be moved to a new refrigerating address, but was sent to a remote exchange address,” says Marszalek. According to its own statements, Crypto.com inadvertently sent 80 percent of its total ETH reserves.
The transfer took place just before Gate.io made its own reserves public. The fair according to but the ethers were not part of the report. On October 29, Gate.io transferred the $456 million back to Crypto.com.
“All ETH has been successfully extracted from Crypto.com and returned to our cold storage,” Marszalek wrote on Twitter. “Since then, we’ve improved our processes and systems to better manage these internal transfers.”
It wouldn’t be the crypto exchange’s first accidental transfer. After an Australian woman requested a $100 refund, she was paid $10 million by Crypto.com. Instead of the amount of money, the account number would have been entered into the computer system. The incident was not noticed until seven months after the transfer.
However, against the backdrop of FTX’s bankruptcy, the most recent bad trade took on a different dynamic. Rumors that Crypto.com is in financial distress increase as the number of investors withdrawing their assets from the exchange over the weekend strongly increased.
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