Concerns about Crypto.com after FTX bankruptcy: Is the crypto exchange wobbling?

Hardly digested the shock of FTX, the next thriller is on the horizon around Crypto.com. It’s not just an accidental $400 million transaction that raises questions. The transfer of $260 million worth of stablecoins just before Crypto.com disclosed its reserves also raises doubts about the crypto exchange’s liquidity. The official side is appeased.

In response to the FTX crash, alongside Binance, Crypto.com also announced that disclose their reserves. CEO Kris Marszalek spoke of “complete transparency”. It should be “necessary for crypto platforms to share proof of reserves publicly”. According to Lookonchain however, there is a need for clarification.

Accordingly, Crypto.com has assets worth around 2.7 billion US dollars. According to the blockchain analysts, 20 percent of this consists of Shiba Inu tokens: $531 million. After bitcoin ($857 million), memecoin takes the largest position in the 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 hold around 1.2 billion CRO tokens (80 million US dollars) as reserves. According to Lookonchain, around 40 percent of the reserves consist of “low liquidity assets” – assets that only guarantee low liquidity.

Report raises questions

Crypto.com is also said to have transferred $260 million worth of stablecoins, possibly to boost its own reserves. “We found Crypto.com drained a total of $210 million in USDT from Binance and $50 million in USDC from Circle,” according to Lookonchain. The money was transferred shortly before CEO Kris Marszalek announced the disclosure of the reserves. A timing that Lookonchain is “very strange”.

Therefore, the blockchain analysts advise investors: “If you have funds on Crypto.com, please take care of the security of your funds”. Similar said Binance CEO Changpeng Zhao: “If an exchange needs to move large amounts of cryptocurrencies before or after they show their wallet addresses, that is a clear sign of trouble. stay away”.

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 Oct. 21. Apparently by accident: “It was supposed to be moved to a new cold storage address, but was sent to an external exchange address,” says Marszalek. According to its own statements, Crypto.com unintentionally sent 80 percent of its entire ETH reserves.

The transfer happened just before Gate.io made its own reserves public. The Stock Exchange 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 was successfully withdrawn from Crypto.com and returned to our cold storage,” Marszalek wrote on Twitter. “We have since 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 sum of money, the account number is said to have been entered into the computer system. The incident was not noticed until seven months after the transfer.

Against the background of the FTX bankruptcy, however, the most recent bad transaction took on a different dynamic. Rumors that Crypto.com is in financial distress are mounting as the number of investors withdrawing their assets from the exchange is over the weekend increased strongly.