Cryptocurrency

Crypto.com becomes latest bank run victim, but CEO says it is business as usual

Chris Marzarek, CEO of Crypto.com, said: sweet On November 14th, we addressed concerns about bankruptcy pressures across the market. He said the platform is operating as normal but at a high level under current market conditions.

Concerns Growing About Crypto.com

On November 11, Marzalek disclosed some of its reserves to quell bankruptcy rumors. However, questions remain about the validity of general margins. In other words, the assets held in the snapshot do not provide a holistic view of the health of the balance sheet.

On November 12th, it was revealed that Crypto.com transferred 320,000 ETH of funds to Gate.io, after which 285,000 ETH was returned. Some say the purpose of the transfer is to help Gate.io falsify its reserves by strengthening its balance sheet assets.

Marzarek He later stated that the transfer to Gate.io was done by mistake and had to be moved to a new cold wallet storage address.Addressing the lack of return on funds, he Said The difference will be returned andGate currently has a balance of US$1 million

New processes and features have been implemented to prevent this from happening again.

Responding to allegations of accounting fraud Gate.io It said the transfer occurred weeks before the Proof of Reserve snapshot and was not included as a result.

However, given the demise of FTX, trust in centralized platforms is low and speculation of cheating is rampant on social media. In response, the user can cash out of her CRO or move funds out of the platform tobank run

Some have reported long delays before withdrawals are honored, leading to speculation that the platform is insolvent. Marzarek For reasons indirectly related to the Crypto.com situation, it denied these reports, stating that withdrawal difficulties were related to specific tokens.

The CRO token faced a weekend of strong selling pressure, hitting a local bottom at $0.0569 early on November 14 (UTC). This represents a 93% drawdown from his all-time high of $0.965 on Nov. 24, 2021.

Crypto.com daily chart
sauce: CROUSD on Tradingview.com

Business as usual says Marszalek

Marszalek, who opened the AMA, said the Crypto.com platform is working as expected, allowing users to deposit, withdraw and trade, downplaying rumors of bankruptcy.

โ€œMost importantly, consider that our platform is functioning as normal. People are depositing, withdrawing and trading. I’m just there.”

Additionally, Marszalek said Crypto.com is the most regulated cryptocurrency company in the industry, holding the most licenses and registrations from ‘tier 1’ jurisdictions including the US, Europe, Singapore and the UK. said.

Pointing out the difference between Crypto.com and FTX, the former operates a business model based on access to cryptocurrencies, with profits reinvested to build a “compliant and secure infrastructure.” .

โ€œThese are businesses in the same industry, but we operate in completely different ways. Our platform has over 70 million app downloads worldwide. Our business model is It’s very simple, giving the public access to digital assets and charging a fee for it.”

Marszalek said the company was not involved in irresponsible lending practices or third party risks, adding: We do not trade client assets. “

Marszalek added that the one-to-one audited proof of reserves provides immediate confirmation that the platform is solvable.

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