Another well-known cryptocurrency exchange luxury consumption Fell during last year’s bull run as users questioned their financial health — and compared it to the most recent one Implosion FTX exchange.
But Crypto.com CEO Kris Marszalek says not to worry: everything is solvent and above board.
“It’s business as usual on our platform,” Marszalek said in an AMA release Sunday to Twitter. “People are depositing, people are withdrawing, people are trading, almost all normal activity is at elevated levels.”
Marszalek participates in AMA to address weekend reveal of exchange apparently inadvertently send $400 million Transferred to rival exchange Gate.io at the end of October. The timely return of the funds in Crypto.com’s “Proof of Reserves” has sparked some skepticism.
At least $45 million has been withdrawn from exchanges since Crypto.com’s token reportedly dropped 20% on news wall street journalas investors recall the recent FTX crash.
However, Marszalek said it was no big deal and the funds were sent to Crypto.com’s own corporate account whitelisted on Gate.io.
“These funds are not at risk of being lost,” he said. “The system doesn’t allow us to send money where we can’t get it back.”
Crypto.com and FTX
Marszalek also took the opportunity to reassure investors more broadly about Crypto.com’s accounting practices.
He said unlike FTX, Trading User Funds Crypto.com uses its own highly volatile token as deposit collateral, holding client assets one-to-one — the underlying token or fiat currency, and nothing else.
“We don’t trade clients’ assets,” he said, adding that mixing client and company funds was a “terrible idea” and should be “outlawed.”
If true, it means that Crypto.com’s solvency is independent of asset prices; in the event of a crash, deposits and withdrawals should be unaffected.
This is also why the exchange’s reserves show 20% stake in SHIB, a cryptocurrency based on dog memes, Marszalek said. The CEO explained that the reason is simple-this token was the “hot emoji coin” last year, and many people bought it.
“We stock what the customer buys,” he said. “As long as our users hold it, we will hold it. We can’t control what you buy.”
What about FTX? Is Crypto.com hurt by the crash?
No, said Marszalek, who claimed that Crypto.com was exposed to FTX crash is the smallest.
The exchange was able to recoup most of its $1 billion investment, losing just $10 million, he said.
He added that Crypto.com is fully regulated in the U.K., EU, U.S., Canada, and Singapore, and said a full, professional audit is underway — though it could take 30 days or more because a rigorous audit “is not safe for cryptocurrencies.” Operate at “speed,” he admonished.
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