BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
SUBSCRIBE
BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
BlockNews.com
No Result
View All Result
Home Business

Crypto.com CEO Downplays FTX Contagion Fears

BlockNews Team by BlockNews Team
November 16, 2022
in Business, Crypto, Media
Reading Time: 4 mins read
A A
Crypto.com-Arena
2
SHARES
25
VIEWS
Share on TwitterShare on Reddit

In a Monday YouTube video, the CEO of crypto exchange Crypto.com Kris Marszalek moved to reassure users of his platform after the dramatic fall of rival firm FTX sparked fears of a market contagion. He said:

You might also like

Around The Block – MAR 24 Week in News

Web3 Needs its ‘WordPress Moment’ to Speed up Positive Disruption

UK to Mandate Declaration of Crypto Holdings in Tax Forms

“Our platform is performing business as usual. People are depositing. People are withdrawing. People are trading. There’s pretty much normal activity, just at a heightened level.”

In the AMA (ask me anything) session on YouTube, Marszalek said that Crypto.com had a “tremendously strong balance sheet,” absolving it from any engagements in the kinds of practices that led to the untimely collapse of Sam Bankman-Fried’s crypto empire in the past week.

Addressing Rumors of Liquidity Issues

On Sunday, however, reports spread that Crypto.com mistakenly sent $400 million worth of Ether (ETH) to crypto exchange Gate.io in October. The revelation raised fears that users’ funds may be at risk at the Singapore-based crypto exchange. Marszalek tweeted that the company had meant to send the funds to its “cold wallet,” an offline crypto wallet, but were instead moved to a whitelisted corporate account with Gate.io. Speaking on the matter, Marszalek said:

“In this case, the whitelisted address belonged to one of our corporate accounts in a 3rd party exchange instead of our cold wallet.”

The executive added that Crypto.com had since strengthened its processes and systems to manage these internal transfers better. Gate.io cited the transaction as the result of an “operation error transfer,” acknowledging the return of all the assets to Crypto.com. 

Notably, the clarifications by the two companies could have done more to assuage investor concerns as traders speculate that Crypto.com may be experiencing liquidity challenges of its own and tapping from customer funds following the FTX saga. 

According to an analysis by Argus, a blockchain data analysis firm, between 7 PM ET Saturday and 6.30 AM ET Monday, a net of $68 million in ETH and $120 million in other Ethereum-based tokens were withdrawn from Crypto.com by its users. During the same duration, the exchange added $62 million in ETH and $140 million of other digital assets to facilitate the withdrawals. 

However, Marszalek denied claims that the company was misappropriating users’ funds in the AMA, saying Crypto.com never engaged “in irresponsible lending practices, took any third-party risks, run a hedge fund or trade customers’ assets.” 

Notwithstanding, the CEO reassured users that Crypto.com would continue being a safe and secure place where everyone can access crypto. He also committed to doing business as usual and proving naysayers wrong through value-adding actions. 

On the credit question, Marszalek said that the exchange continues to have the funds to meet customer withdrawals, which, according to Argus co-founder and CEO Owen Rapaport, lent more credence to his comment that their assets are backed 1:1. 

Exchanges Move To Reassure Customers

Marszalek said his company would publish an audited “proof of reserves” over the next 30 days, citing his cognizance of users’ wish to see the audit released sooner. He added that Crypto.com had to comply with the speed of auditing firms, saying that the objective of such processes is “to verify independently that our reserves match every single coin on the platform.”

An audited proof of reserves led by blockchain analysis firm Nansen last week showed Cryupto.com held 20% of its assets in meme token Shiba Inu (SHIB). Marszalek, however, opined that this reflected what his customers at Crypto.com were buying, saying, “we store whatever our customers buy, and it so happens that last year DOGE and SHIB were two extremely hot meme coins.”

Marszalek also articulated that, unlike FTX, Crypto.com has never used its CRO token as collateral for any loans. He also admitted to Crypto.com transferring $1 billion to FTX over a year to hedge customers’ orders, noting an under $10 million exposure when FTX was shutting down.

The way the brokerage part of crypto works, according to Marszalek, is that every time a customer places an order to buy or sell, there are multiple venues to hedge this order. Crypto.com “picks the most cost-efficient one with the best liquidity and lowest cost” and passes on the savings to customers.

Marszalek closed the session with confidence that his firm is not taking any market risk and always maintains market neutrality. This meant funding flows between their venue and other industry-based venues, thus their exposure to FTX. 

Tags: BusinessCrypto ExchangeCrypto.comFTXGate.io
Tweet1ShareShare1

Recommended For You

Around The Block – MAR 24 Week in News

by BlockNews Team
March 24, 2023
0
Around the Block

Introduction In this recap of the crypto world, we will explore the events and news that had the most significant impact in the past week of March 20th....

Read more

Web3 Needs its ‘WordPress Moment’ to Speed up Positive Disruption

by BlockNews Team
March 24, 2023
0
quicknode

QuickNode is leading the charge as Web3 is poised to revolutionize the world, but it needs its "WordPress moment" to accelerate positive disruption. Blockchain technology can upend manual-intensive...

Read more

UK to Mandate Declaration of Crypto Holdings in Tax Forms

by BlockNews Team
March 24, 2023
0
parliment

The government hopes to close regulatory gaps and stop illegal operations by enacting rules that address various parts of the industry. The requirement to disclose cryptocurrency holdings in...

Read more

The Fed Increases Interest Rates By 25 Basis Points- Impact On Crypto Prices

by BlockNews Team
March 24, 2023
0
The Fed Increases Interest Rates By 25 Basis Points- Impact On Crypto Prices

Crypto prices display rapid fluctuations as the U.S. Federal Reserve hikes interest rates by 0.25%. Investors remain upbeat about the medium-term outlook of Bitcoin and the wider crypto...

Read more

Telegram Enables USDT Stablecoin Payments on the Tron Network

by BlockNews Team
March 24, 2023
0
Telegram

Telegram integrates USDT-TRON (TRC20) into its platform, allowing users to send the stablecoin to their contacts seamlessly and without transaction fees. Telegram's venture into cryptocurrencies began with the...

Read more
Next Post
Blur.io-Logo

Marketplace Blur will continue incentivizing royalties on all NFTs while taking 0% marketplace fees.

Related News

Helium-Logo

Helium Makes The Switch To Solana

September 29, 2022
australia crypto

Australia Supports Crypto Watchdogs in a Step-by-Step Plan to Stop Scammers

February 7, 2023
vitalik buterin

Vitalik Buterin Says It’s Not The Right Time For A Crypto ETF

December 7, 2022

Browse by Category

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized
BlockNews.com

BlockNews.com brings you the most important Crypto and NFT news in the space.

CATEGORIES

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized

RECENT POSTS

  • Around The Block – MAR 24 Week in News March 24, 2023
  • Web3 Needs its ‘WordPress Moment’ to Speed up Positive Disruption March 24, 2023
  • UK to Mandate Declaration of Crypto Holdings in Tax Forms March 24, 2023

© 2022 BlockNews.com - Crypto and NFT news website by JRNY Club.

No Result
View All Result
  • Home
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides

© 2022 BlockNews.com - Crypto and NFT news website by JRNY Club.

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?