Crypto.com has accidentally sent 320k Ethereum (ETH) – worth around $400m at the time of writing – to Gate.io, another crypto exchange.
The target address was owned by Crypto.com anyway, and the funds were transferred back to Crypto.com days later.
The discussion surrounding the mistake prompted an response by Crypto.com chief executive officer Kris Marszalek. “It was supposed to be a move to a new cold storage address”, he tweeted on November 13.
His tweet chain also contained a post explaining that the transaction that caused “so much FUD & speculation” was actually made on October 21.
It still took 5-7 days for the funds to make it back to Crypto.com, as @jconorgrogan pointed out on Twitter.
The same user also mentioned that at one point on November 14, Crypto.com hadn’t processed a single withdrawal in “over 10 minutes”, while the exchange’s own status checker marked it operational.
The 320k ETH makes up around 80% for the total ETH that Crypto.com has in cold storage, and Marszalek confirmed that the targeted address was owned by the exchange. He clarified that it’s actually a white-listed corporate address at Gate.io.
FTX’s collapse means these types of mistakes are now being looked at extremely closely and companies are under increased scrutiny.
Crypto.com’s CEO assured the public, and investors, that the company has implemented new preventative features and processes to avoid these types of mistakes in the future.
The focus of this story, however, might lie elsewhere entirely, as proof-of-reserves is becoming the normal response from companies to inspire confidence that investors and users’ funds are secure.
Not all members of the community were satisfied with the explanation. Some began speculating that the transfer was coinciding very closely with Gate.io’s October 28 proof-of-reserves report.
For those, it’s an indication of dishonesty about the exchanges’ abilities to provide financial stability.
Gate.io hasn’t let this narrative run rampant, however, and quickly moved to squash it, tweeting a response that Crypto.com’s “deposit was not included” in the report.
Some analysts, however, still recommend to “get off these platforms”.
FTX’s collapse continues to echo in almost every story covering cryptocurrency exchanges, and this alleged mistake by Crypto.com is no exception.
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