320,000 ETH Mistakenly Transferred by Crypto.com to Gate.io

320,000 ETH Mistakenly Transferred by Crypto.com to Gate.io
  • A change to a new cold storage location was misdirected to a trusted external exchange.
  • On-chain data does corroborate that Gate.io did refund 285,000 ETH.

After FTX’s demise, top cryptocurrency exchanges were urged to publish their cold and hot wallet addresses as evidence of reserves to reduce risks and boost investor trust. There was a suspicious movement of 320,000 Ethereum to a wallet address associated with Gate.io on October 21, 2022, as shown by data from a cold storage facility accessed when verifying the availability of money on Crypto.com.

Even though Crypto.com and its partner, hardware wallet provider Ledger, claim to store 100% of user-owned cryptocurrency offline in cold storage, community member @jconorgrogan is concerned about the transfer of 320,000 ETH from their cold wallet to Gate.io.

Misdirected to Trusted External Exchange

As the debate heated up, Crypto.com’s CEO Kris Marszalek said that 82% of the company’s ETH in cold storage had been transmitted to Gate.io by mistake. A change to a new cold storage location was misdirected to a trusted external exchange.

Marszalek, however, verified that the monies had been restored to Crypto.com’s cold storage and informed the investors that new procedures and safeguards had been put in place to avoid a recurrence.

To be fair, on-chain data does corroborate that Gate.io did refund 285,000 ETH to Crypto.com, and Marszalek did say that all monies were returned. An additional 35,000 ETH were discovered to have been transmitted to an unconfirmed address by the cryptocurrency exchange.

Not the first time an error with a transfer on Crypto.com has made the news. In August 2022, it was discovered that Melbourne investors had received an AUD $10.5 million (worth over $7 million) from Crypto.com, when they should have received AUD $100 ($67) refund. Although it happened in May of 2021, nobody knew about it until a routine audit in December of that year.

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Content writer by profession. A crypto lover and has passion for writing. Follows the developments of digital currency right from its launch, years ago.