Problems for Crypto.com: suspicious activity and a $15 million loss
Problems for Crypto.com: suspicious activity and a $15 million loss
Security

Problems for Crypto.com: suspicious activity and a $15 million loss

By Stefania Stimolo - 19 Jan 2022

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The Crypto.com cryptocurrency exchange has been experiencing an ambiguous situation since the beginning of this week. In fact, while users have reported problems accessing their accounts, Crypto.com has suspended, investigated, and then reactivated withdrawals. 

According to Certik and Peckshield, a security and blockchain auditing firm, the exchange actually lost $15 million. 

Problems for Crypto.com: suspended withdrawals and ongoing investigation

Earlier this week, Crypto.com published a tweet in which it announced that many users reported suspicious activity on their accounts and that, in order to investigate the issue, it would suspend withdrawals from the platform

“We have a small number of users reporting suspicious activity on their accounts. We will be pausing withdrawals shortly, as our team is investigating. All funds are safe”.

A few hours later, Crypto.com urged users to log back into their app and exchange accounts and reset their 2FA. Only in this way would they then reactivate withdrawals

Crypto.com CEO Kris Marszalek wanted to express his thoughts on the matter:

“Some thoughts from me on the last 24 hours:

  • no customer funds were lost
  • the downtime of withdrawal infra was ~14 hours
  • our team has hardened the infrastructure in response to the incident

We will share a full post mortem after the internal investigation is completed”.

But the reality is that no real solution to the problem seems to have been found, considering that many users continued to report problems accessing their accounts and also because the blockchain security and monitoring companies Certik and Peckshield published different data. 

A $15 million loss? 

Yesterday, the blockchain security and data analytics company, Peckshield Inc. published its version of the facts regarding the Crypto.com case:

“The Crypto.com loss is about $15M with at least 4.6K ETHs and half of them are currently being washed via TornadoCash”.

Tornado.cash is an anonymity-based protocol that allows users to conduct private transactions.

Decentralized security solutions company Certik also confirmed Peckshield’s report and published a list of addresses of users allegedly affected by the event, and the number of ETH taken from each of those accounts. The company stated that 282 accounts were affected.

Criticism of the trending commercial starring Matt Damon

Crypto.com is becoming increasingly visible to increase its popularity and, according to its vision, mass adoption of cryptocurrencies. 

In addition to this week’s ambiguous situation, it seems that some have publicly stated that they also disagree with its philosophy, especially after Crypto.com’s trending commercial starring Matt Damon went viral. 

In that context, Damon acted out his script by stepping into the part of a motivational influencer and the most criticized key-phrase of the commercial was “fortune favors the bold,” referring to cryptocurrency investors. 

Carole Cadwalladr, a writer for the Guardian, compared Crypto.com to a Ponzi Scheme. Adam Johnson, host of the Citations Needed podcast also expressed his idea and called it a “financial scheme that uses macho methods to push men to force their meager savings”.

Stefania Stimolo

Graduated in Marketing and Communication, Stefania is an explorer of innovative opportunities. She started out as a Sales Assistant for e-commerce, and in 2016 she began to develop a passion for the digital world, initially in the Network Marketing sector, where she discovered and became passionate about the ideals behind Bitcoin and Blockchain technology, which lead her to work as a copywriter and translator for ICO projects and blogs, and organize introductory courses.

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