Wednesday, February 8, 2023
Technology

Crypto.com Sends $400 Million in Ethereum to the Wrong Wallet

Crypto.com CEO Kris Marszalek admitted the exchange accidentally sent $400 million in Ethereum to DeFi competitor Gate.io. Instead, the company intended to send the crypto to cold storage. Though the rival company returned the 320,000 ETH, the mistake made CRO, Crypto.com’s native token, tumble. This mistake is the company’s second accidental multi-million dollar transfer, sparking uncertainty after the collapse of FTX.

The misplacement of 320,000 Ethereum by Crypto.com comes at an inauspicious time for the cryptocurrency industry. According to Decrypt, the $400 million in ETH made up about 80% of the exchange’s total ether reserves. And according to Coinbase, CRO fell nearly 40% in the last week. However, that’s after recovering over 10% over the previous 24 hours. 

Although, a November 14 tweet by Marszalek said withdrawal volume on the platform dropped 98% since the previous day. He called it “business as usual” for the exchange in an attempt to combat FUD (fear, uncertainty, and doubt). Although Sam Bankman-Fried’s famous last words were “FTX is fine” just before the exchange’s collapse. Crypto community members drew comparisons immediately between the two exchanges, though Marszalek vehemently denied any foul play from Crypto.com.

“We never engage as a company in any irresponsible lending practices,” Marszalek said during a YouTube AMA (ask me anything). “We do not run a hedge fund, we do not trade customers’ assets.”

FTX CEO Sam “SBF” Bankman-Fried now notoriously transferred the exchange’s assets to a sister company, crypto hedge fund Alameda Research. SBF could face criminal charges for the mishandling of customer assets.

They accidentally sent millions of dollars to the wrong people…again. 

In 2021, the exchange accidentally sent $10.5 million to an Australian woman who asked for a $100 refund. So naturally, the woman used the money to purchase a $1.35 million mansion and enjoy a shopping spree. Crypto.com subsequently sued the woman who sold the home and returned the money as Victoria’s Supreme Court ordered.

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