Cryptocurrency exchange crypto.com is in the spotlight after the price of its token Cronos plummeted as the company denied liquidity issues.
Australian investors are among those withdrawing funds from the exchange as crypto.com’s native token Cronos plummeted 46.55 percent this week, down about $1 billion ($1.49 billion). US dollars).
The entire crypto industry is on edge after FTX, one of the world’s largest crypto exchanges, suddenly went bankrupt after a liquidity crisis on Friday.
The high-profile collapse of FTX, crypto hedge fund Three Arrows Capital and crypto bank Celsius has dragged the price of Bitcoin, Ether and Cronos lower.
Bitcoin price is currently at $24,264.98, down 72.76% for the year, and Ether is at $1,810.74, down 71.30%.
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If you have to say “I’m not a witch,” that doesn’t bode well, and crypto.com has vehemently denied liquidity issues as rumors of a run spread.
The CEO of the Singapore-based exchange, Kris Marszalek, assured clients that the company’s balance sheet was “very strong” and its reserves covered all client assets.
“People deposit, people withdraw, people trade,” he said. “There’s pretty normal activity, just at an elevated level,” Bloomberg reported.
“Withdrawals are processed as usual. no FUD [fear, uncertainty, doubt] Please,” Mr. Marszalek wrote on Twitter.
Crypto.com has about 70 million users and had less than $10 million in FTX, Mr. Marszalek said.
He has previously stated that the company will issue an audited “proof of reserve” to show customers’ funds are safe.
Crypto.com has been making headlines lately for a series of major bugs.
The company accidentally transferred more than $10 million to Melbourne-based Thevamanogari Manivel last year. She should get a $100 refund.
The error was discovered seven months later during a routine audit that Victorian Supreme Court Justice James Elliott this year described as “extraordinary”. Ms Manivel was asked to pay back the money.
And recently, the firm announced that it accidentally transferred and then received back $595 million ($400 million) worth of ether.
“It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address. We worked with the Gate team and the funds were then returned to our cold storage facility. New processes and features have been implemented to prevent this from happening again,” said Marszalek.
But Binance CEO Changpeng Zhao said there is a “clear sign of trouble‘ at another crypto exchange, apparently alluding to crypto.com.
“If an exchange needs to move large amounts of crypto before or after they show their wallet addresses, that’s a clear sign of trouble. Stay away,” he wrote.
There is also a growing movement for crypto asset “self-custody”, the idea that investors should store their cryptos in self-custodial wallets with no third party involvement.
CZ recently wrote: “Self-custody is a basic human right. You are free to do so at any time.
“Just make sure you do it right. Recommend starting with small amounts to learn the technique/tools first. Mistakes can be very expensive here.”
Investor Ben Armstrong wrote: “I just withdrew all my funds from crypto.com.
“I don’t necessarily think there’s anything wrong [crypto.com] …but if you haven’t yet learned the importance of self-custody, then there may be no hope for you. Not your keys, not your crypto.”
High profile accounts have been spreading rumors about crypto.com’s financial health.
“A potential bank run on crypto.com may be underway,” one account wrote.
“My withdrawal of 2 BTC from crypto.com has been pending for 24 hours… This is not normal,” wrote another.
“Is crypto.com next?” another speculated.
However, Mr. Marszalek was defiant.
“We’re just going to continue with our business as usual and all the naysayers and there are proving it [sic] A lot of that can be seen on Twitter these last few days,” he said during an address streamed live on YouTube.
“We will prove them wrong with our actions. We will carry on as we have always done.
“We will continue to be the safe place where everyone can access crypto.”
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