A few months ago, Crypto.com (CRO) sent from one of its wallets a significant sum in the crypto Ethereum. A sum of about $400 million is what we are talking about. It would amount to around 80% of Crypto.com’s reserves in Ethereum. The result? A dramatic drop in the crypto CRO, the exchange’s token.
What has raised suspicions and alerted investors is that albeit mistakenly, the cryptocurrency sum was sent to a wallet owned by Gate.io, a rival exchange platform.
The CEO of Crypto.com says it was a mistake, but the consequences reflect on the crypto CRO
Following the failure of FTX, the ecosystem of the crypto world is indeed fragile, and any movement that may arouse suspicion is questioned by investors.
In this case, we are talking about a transfer worth $400 million, which according to Crypto.com CEO Kris Marszalek was apparently just a mistake.
There has been much discussion about this move; the transfer was made to a wallet of a rival exchange, namely Gate.io, but after only one week the funds were sent back.
Kris Marszalek spoke out on social media to explain the situation and more importantly, to calm the spirits of panicked investors:
“It was supposed to be a movement to a new address in cold storage, but it was sent to a whitelisted address of an external exchange. We worked in concert with the Gate team the funds subsequently were returned to our cold storage. We also included new procedures to prevent this from happening again.”
However, the Crypto.com CEO’s statements only fueled further discussion on Twitter. Binance CEO Changpeng Zhao did his part, poking at the rival exchange platform:
“If an exchange moves significant amounts of crypto before or after demonstrating its addresses, it is a clear sign of trouble. Stay away from it.”
Investors’ fears were reflected on the crypto Cronos (CRO), which opened -16% this Sunday, dragging all the tokens in its target ecosystem with it.
This is not the exchange platform’s first mistake
This is not the first time the Crypto.com platform has faced a mistake in transferring funds. The platform last year accidentally transferred $10.5 million to a woman in Melbourne, Australia, who had requested a refund of only $100.
The company did not realize the mistake until seven months later.
Crypto.com subsequently took legal action against the user in the Supreme Court to get the money back. The company explained to the court that an employee had mistakenly entered the account number, instead of the correct $100 figure, in the payment field
The incident occurred in May last year but was only discovered by Crypto.com just before Christmas, following a company audit. But during these months the money had already been spent or transferred elsewhere. The woman even purchased a mansion worth several million dollars.
Therefore, transfer errors are nothing new for the Crypto.com platform!
Cronos (CRO): despite major partnerships, the price never went up
The series of prestigious partnerships have never really raised the value of Cronos (CRO), which is also a victim of the bearish market that is affecting the cryptocurrency market.
The attempts to advertise the Crypto.com exchange platform have been many indeed. Just think of how many sponsorships in the past year alone have been made.
Among the many, Crypto.com has purchased the naming rights to the current Crypto.com Arena in Los Angeles (LA) and sponsorships with Formula 1 (F1), the Ultimate Fighting Championship (UFC), the National Basketball Association (NBA) Philadelphia 76ers team, French soccer giant Paris Saint-Germain, Spanish soccer giant Atletico Madrid, and Italian Serie A.
In addition, it was announced in March that Crypto.com will be the first crypto platform to be an official sponsor of a FIFA World Cup event, specifically the upcoming World Cup in Qatar.
But apparently, these prestigious partnerships have not been as successful as hoped, in the last event all sponsorship announcements had no pump effect for the crypto Cronos (CRO).
Crypto.com and the agreement with Busan
Even in a bear market phase, Crypto.com continues to try to broaden its scope and partnerships. The most recent is the one with the city of Busan, with which a Memorandum of Understanding was signed that contains several interesting tidbits for what will be at least in part the future of the industry.
An agreement that points to the widening and more widespread implementation of the blockchain-related world, passing through one of its most important players globally. Something that allows for optimism even in a phase of bear market and prices that are not exciting. However, it is precisely these phases that can provide greater peace of mind for development.
“The city of Busan is making great efforts to become a global hub of innovation, and we are happy to partner and support those efforts. There are real opportunities to make a huge impact in advancing the potential of blockchain technologies in Busan and beyond, and we are ready to collaborate by also leveraging our network of relationships and expertise in realizing this potential.”
Words from Crypto.com CEO Kris Marszalek.