Barry Tech Review

Best review technology by Barry

Crypto.com In response to concerns about FTX contagion, the CEO asserts that the company will disprove the doubters


After the shocking failure of rival company FTX raised concerns about a market contagion, the CEO of cryptocurrency exchange Crypto.com turned to YouTube on Monday to reassure customers of his platform.

Marszalek stated in the AMA that “business as usual” was being conducted on the site. People are making deposits, withdrawals, and trades, which is essentially standard activity but at a higher volume.

The CEO of YouTube declared in a “AMA” (ask me anything) that his company had a “tremendously robust balance sheet” and wasn’t engaging in the same kinds of tactics that caused Sam Bankman-FTX Fried’s to fail last week.

On Friday, FTX filed for Chapter 11 bankruptcy protection after an exchange run and a decline in the value of its native FTT coin were caused by worries about the company’s financial stability. The largest platform for trading digital assets, Binance, and FTX attempted to come to an acquisition agreement, but this fell through after Binance withdrew, citing allegations of mishandled customer cash and claimed U.S. government investigations into FTX.

Marszalek stated on Monday, “As a company, we never engaged in any risky lending practises, and we never assumed any third-party risks. “We do not manage a hedge fund or trade the assets of our clients. We always had a reserve of 1 to 1,” he continued.

According to CNBC on Sunday, Alameda Research, FTX’s sister company, borrowed billions in customer cash from the exchange to make sure it had enough money on hand to handle withdrawals. Bankman-Fried said its recent bankruptcy case was due to problems with a leveraged trading strategy but declined to comment on claims of stealing customer monies.

His remarks follow the disclosure on Sunday that, in October, Crypto.com transmitted $400 million worth of ether cryptocurrency in error to Gate.io, another cryptocurrency exchange, causing worries that the funds of Crypto.com users may be in danger.

Gate.io and Crypto.com said they were transmitted inadvertently and swiftly returned to Crypto.com as the problem was discovered.

A whitelisted corporate account with Gate.io was used instead of the company’s intended “cold wallet,” which refers to an offline cryptocurrency wallet, Marszalek stated in a tweet on Sunday. Gate.io said in its own statement that all assets have subsequently been returned to Crypto.com and that the transactions were the result of a “operation error transfer.” The whitelisted address in this particular instance belonged to one of our corporate accounts in a third-party exchange rather than our cold wallet, he continued. In order to better manage these internal transfers, we have since strengthened our procedures and systems.

That didn’t do much to allay investor worries, though, as traders speculated that Crypto.com might be having its own liquidity problems and using customer cash after the FTX collapse. On Monday, Marszalek responded to accusations that it was stealing users’ money by asserting in the AMA that “we do not trade clients’ assets.” “We will just carry on with business as usual, and we will prove all the doubters wrong with our actions,” Marszalek said. “There are many of these right now on Twitter in the last couple of days.

To continue being a safe and secure location where anyone can access cryptocurrency, we’ll carry on as usual. Data firm Argus provided public blockchain data analysis with CNBC, which reveals that starting at 7 p.m. ET on Saturday till 6:30 a.m. ET on Monday, customers of Crypto.com withdrew a total of $68 million in ether and $120 million in other Ethereum-based coins.

According to Argus, within the same time period, Crypto.com invested $62 million in ether and $140 million in other digital assets to cover the withdrawals. According to Owen Rapaport, co-founder and CEO of Argus, “To its credit, Crypto.com continues to have the funds to meet these withdrawals, lending further credence to its CEO’s claims that their assets are backed 1:1.”

Crypto.com is one of numerous exchanges that have committed to providing a breakdown of the reserves that back customer assets to reassure users after the bankruptcy of FTX. Marszalek said he expects Crypto.com to publish an audited “proof of reserves” within the next 30 days. He said he understands users’ wish to see the audit released sooner, but that auditing firms “don’t operate on crypto speed.”

News Summary:

  • Crypto.com In response to concerns about FTX contagion, the CEO asserts that the company will disprove the doubters
  • Check all news and articles from the latest Business news updates.

Leave a Reply

Your email address will not be published. Required fields are marked *