S’pore-Based Crypto.com Responds to Allegations That They, Too, Are in Financial Trouble

After FTX filed for bankruptcy last week, Singapore-based Crypto.com says they have a robust balance sheet and weren’t at risk of financial trouble.

An audited proof of reserves will allegedly be published within the next few weeks to prove that they’re stable.

US$400 Million Worth of Ether Tokens Transferred, Investors Spooked

Crypto.com is ranked in the top 10 cryptocurrency exchanges globally, but smaller than other leaders like Binance and FTX.

FTX crashed last week and filed for bankruptcy, so you can understand why Crypto.com’s 70 million customers started to get wary of the crypto market.

This was exacerbated by a user who ploughed through the company’s transactions after they posted their cold wallet addresses online. The user found out that Crypto.com had a transfer of US$400 million worth of ether tokens to another exchange, Gate.io, on 21 October.

This led to more investors getting spooked, with withdrawals at Crypto.com rising since this reveal.

Funds Recovered, Reserves Stable

To address these rumours, chief executive Kris Marszalek did a YouTube live stream for an Ask-Me-Anything session.

He had previously tweeted to say that the US$400 million worth of tokens were recovered and returned to Crypto.com, which he registered in the stream.

He also said that the platform always maintained reserves to match every coin customers held on their platform.

“At no point were the funds at risk of being sent somewhere where we could not get it back… it had nothing to do with any of the craziness that has been happening since FTX collapsed,” Marszalek said, noting that the transfer occurred over three weeks ago before the FTX crash.

Not Affected by FTX Crash

Marszalek said that the platform moved about US$1 billion to FTX over a year, but most of it was recovered. Exposure at the time of FTX’s collapse was less than US$10 million.

There were also questions on why the exchange had 20% of reserves in Shiba Inu, the meme token. He explained that the reserves were a direct reflection of client holdings, and because SHIB and Dogecoin were so popular in 2021, their reserves reflected that.

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Will Operate As Usual

He said that they will continue with business as usual and prove the naysayers wrong with their actions.

“We will continue being the safe and secure place where everybody can access crypto,” Marszalek said,  promising the publishing of an audited proof of reserves report within weeks.

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Featured Image: crypto.com