All Eyes on Crypto.com After FTX’s Collapse.
Crypto.com has found itself at the center of negative scrutiny following the collapse of Sam Bankman-Fried’s crypto exchange FTX and trading firm Alameda Research. Based outside the United States, Crypto.com offers a range of products for buying, selling, storing crypto and trading.
Despite being smaller than FTX, it ranks among the top 15 global exchanges. Crypto.com’s scrutiny began over the weekend when some Twitter users speculated that the company was facing problems. In October, the company mistakenly sent about $400 million worth of cryptocurrency to Gate.io. CEO Kris Marszalek acknowledged the incident only after this transaction came to the fore through public blockchain data.
Rumors worked overtime when the CEO of Binance Changpeng Zhao tweeted on Sunday that Crypto.com was moving large amounts of crypto. He said it is a clear sign of problems and urged users to stay away. Because of FTX’s downfall, Crypto.com’s native token CRO like fellow coins and tokens took a hit, plunging nearly 40% in the last week. Adam Cochran, an investor in blockchain projects and founder of Cinneamhain Ventures, said he would get his money out of Crypto.com. He tweeted if they are full reserves they shouldn’t care if one sits on the sidelines for a week, but the company’s handling of the situation hasn’t met the bar.
With rumors floating around in the ongoing uncertainty, Marszalek is trying to reassure users and regulators that Crypto.com is fine. He highlighted in a YouTube video that the company had a tremendously strong balance sheet and its business as usual with deposits, withdrawals, and trading activity. Marszalek added that their withdrawal queue is down 98% within the last 24 hours. Moreover, in a recent interview, he said Crypto.com has engaged with more than 10 regulators about the shocking event surrounding FTX and how to keep them from happening again.