Crypto Industry Shocked FTX Case, Crypto.com Send 320,000 ETH To Gate.io

Crypto.com crypto exchange transfers hundreds of thousands of ETH to Gate.io. (Photo; Doc. Crypto Ast)

JAKARTA The bankruptcy of the leading crypto exchange FTX has had a negative impact on the crypto industry as a whole. Almost all crypto assets have experienced price declines, as a result of the collapse of FTX. In addition, another leading crypto trading company, Crypto.com is reported to have sent their funds in the form of Ethereum to crypto trading platform Gate.io.

For the first time, a number of crypto trading companies have decided to announce evidence of backup funds (proof-of-reserve) and their wallet addresses containing in-platform fund deposits. One of them is done by crypto exchange company Crypto.com.

Crypto.com is one of the leading exchanges to publish their addresses, featuring how many and what cryptocurrencies are stored on behalf of their customers.

However, not long after the information was announced, a number of crypto community members found Ethereum transactions on a large scale, namely 320,000 ETH (worth 400 million US dollars) had been transferred to another crypto trading platform. This amount represents 80 percent of Crypto.com's ETH.

Responding to these findings, Crypto.com CEO Kris Marszalek explained that hundreds of thousands of ETHs should have been transferred to cold wallets. However, it was even sent to crypto exchanges.

This should be a transfer to a new cold storage address, but sent to an external exchange address that is whitelisted. We are working with Gate's team and the funds are then returned to our cold storage. The process and new features are implemented to prevent this from happening again," said the company's CEO, Kris Marszalek.

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However, the crypto community cast doubt on Marszalek's explanation. They questioned the ETH shipment was unlikely to be done accidentally.

Apart from all that, in 2021, Crypto.com also sent a cryptocurrency worth 10 million US dollars to a woman who is one of its users. In fact, the exchange should have sent 100 US dollars.

However, the shipment of 320,000 ETH clearly worries users of digital asset trading platform Crypto.com. On the other hand, it is not clear whether Crypto.com has a relationship with FTX or not.

Previously, according to Protocol reports, Crypto.com had stopped withdrawing USDC and USDT on the Solana blockchain on Wednesday 9 November, citing the role of FTX in trading Solana-based stablecoins and operating Solana bridges.

On the other hand, Solana has a connection with a crypto exchange based in the Bahamas archipelago, FTX. Forbes reports that Solana is the second largest deposit owned by partner company FTX, Alameda Research.