- Crypto.com sent funds equivalent to around 80% of its total ETH reserves.
- Crypto.com published its proof of reserves on November 12.
Following the major cryptocurrency exchange FTX’s insolvency, another centralized crypto exchange Crypto.com revealed that unknowingly it had transferred 320,000 ETH, or about $400 million at the time, to a public address that is registered at a rival exchange.
According to Etherscan, the block explorer, Crypto.com sent funds equivalent to about 80% of its total ETH reserves to rival exchange Gate.io on October 21. However, on October 29, Gate.io returned some amount of 285,000 ETH, equivalent to $456 million due to a slight ETH rise.
Crypto.com CEO Kris Marszalek stated on his Twitter account on Saturday that the fund was supposed to move to a cold storage address. Also, Marszalek highlighted that all of the funds have subsequently been returned and the dollar balance on Gate for Crypto.com is in the single-digit millions.
It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address. We worked with Gate team and the funds were subsequently returned to our cold storage. New process and features were implemented to prevent this from reoccurring.— Kris | Crypto.com (@kris) November 13, 2022
Crypto Exchanges Turning Towards Transparency
In the wake of the shocking collapse of FTX, significant cryptocurrency exchanges are being monitored and moving to transparency. As on October 28, Gate.io provided proof of reserves to its users. In addition, Crypto.com declared its proof of reserves on November 12. Proof-of-reserves (POR) audits are managed by impartial third parties on behalf of their clients to reveal transparency.
Further, the Cronos (CRO) native currency of Crypto.com is down by over 20% in the last 24 hours and more than 50% in the last week. Cronos has a market cap of $1 billion, which declined by around 21% in the last day, as per CoinGecko.