The Morning Crypto

the-morning-crypto

    CEO of Crypto.com Marszalek denies rumours of deep debt

    Tanya Sharma
    Nov 15, 2022 19:22
    Kris Marszalek, the CEO of Crypto.com, participated in a live YouTube presentation where he addressed a variety of inquiries about the situation of his company, including its "tremendously robust balance sheet."
    CEO of Crypto.com Marszalek denies rumours of deep debt
    Source: Unsplash

    Expecting a harsh crypto winter for Crypto.com

    Though CEO Kris Marszalek stated as much during a live interview on the website's YouTube channel, "Expect a harsh crypto winter," Crypto.com is not going anywhere.

    On worries that the Singapore-based exchange may be the next to experience a liquidity crisis, Crypto.com's CRO token has fallen roughly 45% over the previous week.

    The daily volume of the exchange has dropped from highs of around $4 billion last year to just $284 million this past October, and withdrawals are on the rise as users and investors take their money out of the system.

     

     

    Marszalek exchange had Limited exposure to FTX

    In the interview, Marszalek reaffirmed that the exchange has a solid balance sheet and stated that its exposure to FTX is only $10 million, as opposed to the earlier possibility of $1 billion in combined activity between the two exchanges.

    Marszalek stated, "We recovered $990 million from FTX," pointing out that fund transfers between exchanges are an essential aspect of the company.

    Marszalek stated on Monday, "As a company, we never engaged in any risky lending practices, and we never assumed any third-party risks. "We do not manage a hedge fund or trade the assets of our clients. We always had a reserve of 1 to 1," he continued.

    The market's skepticism of Crypto.com continues to grow 

    The market's skepticism of Crypto.com may have been influenced in part by the exchange's $400 million error, which involved sending ether by mistake to an account at the Gate.io exchange. and were swiftly brought back to Crypto.com.

    The company intended to send the money to its "cold wallet," which is an offline cryptocurrency wallet, but instead moved it to a corporate account with Gate.io that has been whitelisted, according to a tweet by Marszalek on Sunday.

    Gate.io claimed that all assets had subsequently been returned to Crypto.com and that the transactions were the result of an "operation error transfer" in its own statement.

    “The whitelisted address in this particular instance belongs to one of our corporate accounts in a third-party exchange rather than our cold wallet,” he continued. “In order to effectively manage these internal transfers, we have enhanced our procedures and processes.”

    The monies were not in danger of disappearing, according to Marszalek. We couldn't send money wherever it couldn't be recovered since the system wouldn't let us.

    Exchanges have committed to providing a breakdown of the reserves

    Additionally, he stated that Shibu Inu coin makes up 20% of Crypto.com's reserves because that is what its users trade and that everything in its reserves is backed 1:1 by cryptocurrency deposits from users.

    Crypto.com is now being audited, however, it will take some time. He emphasised that in order for the industry and Crypto.com to advance, audit firms "don't work at crypto speed."

    He emphasised that withdrawals are operating as intended. The only interruption has been due to Ray, SRM, and GALA. SRM and FTX are intertwined, he claimed.

    This indicates that we are always market neutral and do not assume any market risk. However, it also implies that money must move from our venue to other venues in the sector, and FTX was one of them.

    Contrary to the association between FTX and Alameda and FTX's token, FTT, and Alameda, CRO, Crypto.com's token, has never been utilised as loan collateral, according to Marszalek.

    We won't require to raise money, he continued.

    Marszalek staying strong amid all the rumours

    Marszalek stated in the AMA that "business as usual" was being conducted on the site.

    “People are making deposits, withdrawals, and trades, which is essentially standard activity but at a higher volume.”

    "We will just carry on with business as usual, and we will prove all the doubters wrong with our actions," Marszalek added. "There are many of these right now on Twitter in the last couple of days. To continue being a safe and secure location where everyone may access cryptocurrency, we'll carry on as usual". 

    Related: How the Crypto Market Will Shape Up in 2023