Crypto.com Accidentally Sent $400M of Ethereum to Wrong Address, CEO Calls Worries 'FUD'

Crypto.com Accidentally Sent $400M of Ethereum to Wrong Address, CEO Calls Worries ‘FUD’

After the shock FTX collapseother centralized crypto exchanges are under the microscope, and Crypto.com customers are worried after CEO Kris Marszalek admitted that his exchange accidentally sent 320,000 ETH, about $400 million at the time, to a public address registered on a competing exchange.

Blockchain records on Etherscan show that on October 21, Crypto.com sent the sum, approximately 80% of its total ETH reserves, to rival exchange Gate.io, just before Gate.io provided “proof of reservesto its users on October 28 as part of a renewed push for transparency after the FTX crisis.

Gate.io then returned the slightly diminished sum of 285,000 ETH, or approximately $456 million following a slight increase in ETH, October 29. Crypto.com released his proof of reserves on November 12.

“It was supposed to be a move to a new cold storage address, but it was sent to a whitelisted external exchange address,” Marszalek said. tweeted Saturday. “We worked with [the] The Gate team and the funds were then returned to our cold storage. New processes and features have been implemented to prevent this from happening again.

Marszalek added that all funds have since been returned and that Crypto.com’s dollar balance on Gate is in the single-digit millions.

Cronos, the native Crypto.com token, is now down more than 50% for the week, according to data from CoinGecko.

In a thread exploding the resulting speculation as “FUD”, Marszalek share a snapshot of Gate showing its October 19 reserves without Crypto.com funds. also wears published on his blog late on a Saturday night one”clarification” on his “assistance to Crypto.com in recovering the erroneous transfer of 320k ETH”.

Crypto.com and Gate.io did not immediately respond to requests for Decrypt for more comments.

The puzzling transaction comes days after one of the world’s five largest stock exchanges suffered a catastrophic bank run and had no cash to cover, leading to the complete collapse of the empire and reputation. by Sam Bankman-Fried.

Like FTX, Crypto.com markets itself as a regulated and trustworthy crypto firm, which many now doubt.

Binance CEO Changpeng Zhao, who sparked the FTX selloff a week ago when he tweeted that his company would liquidate its FTX token stash, quickly pounced on the Crypto.com fiasco.

“If an exchange has to move large amounts of crypto before or after demonstrating its wallet addresses, that’s a clear sign of trouble,” he said. tweeted. “Stay away.”

Crypto.com’s proof of reserves, published on November 12, was already the subject of some perplexity. The document showed that around 20% of the exchange’s holdings were denominated in SHIB, the crypto joke based on another crypto joke, DOGE.

FTX spent hundreds of millions of dollars on the sports sponsorship deals that quickly dissolve following its insolvency; the Miami Heat announced on Friday that it would drop the FTX name and seek a new stadium naming partner. Crypto.com has also spent a lot of money on sports: its $700 million arena naming rights deal with Los Angeles Lakers overshadows FTX/Heat deal and trade is a sponsor of the 2022 FIFA World Cup in Qatar.

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