Over the past week, Crypto.com’s CRO token has fallen nearly 45%. This is due to fears that the Singapore-based cryptocurrency exchange will be the next to face a liquidity crisis after the FTX bankruptcy.
Indeed, the exchange’s daily volume has plummeted from last year’s highs of about $4 billion to about $284 million last October. Withdrawals continue to increase as users and investors remove their funds from the platform.
However, the CEO of Crypto.com, Kris Marszalek, stepped in to reassure investors, stating:
“Expect a tough crypto winter, but Crypto.com isn’t going anywhere.”
Why Crypto.com is safe, the words of the company’s CEO
After growing fears about the possible collapse of Crypto.com, Marszalek was called to action.
Indeed, in an interview yesterday, the CEO of Crypto.com reiterated that the exchange has a strong balance sheet and said that its exposure to FTX was limited to $10 million.
Specifically, he added:
“We recovered $990 million from FTX and fund flows between exchanges are a necessary part of the business.”
So, according to Marszalek, nothing to worry about, considering the fact that CRO, Crypto.com’s token, has never been used as loan collateral, unlike FTX’s relationship with Alameda and FTX’s token, FTT.
In addition, Crypto.com is dampening the weekend’s tones of alarm over a massive transfer of Ethereum to a rival company, which had turned the spotlight on a possible default, with a rush of withdrawals.
The CEO of cryptocurrency exchange Crypto.com said the company is ready to prove that there is no trouble ahead: the balance sheet is strong and no risks have been taken.
Concerns around the CRO token: here’s what happened
Part of the market’s distrust of Crypto.com may stem from the recent $400 million incident in which ETH was accidentally sent to an account at an exchange called Gate.io.
Not only that, the Wall Street Journal reported huge withdrawals going on from Crypto.com over the weekend. With the exchange’s CRO token collapsing, there was speculation that users were disposing of the token and/or that the company was selling tokens in the marketplace to acquire crypto or useful money to meet withdrawal requests.
The CEO Kris Marszalek responded to some clarifying questions on YouTube live streaming with respect to the panic that spread on Twitter yesterday about a default of the exchange, which is among the top ten in the world by revenue.
Marszalek in fact stated:
“We will prove them wrong about our actions. We will continue to operate as we always have and be the safe place for everyone to access cryptocurrencies.”
In addition, a reserve verification report will be published within weeks, the company’s CEO pointed out.
Marszalek explained that all addresses for transfers of these scales are whitelisted and approved. The destination address was Crypto.com’s corporate account on Gate.io, and the funds were returned after Gate.io increased the corporate account’s daily transfer limit.
In the interview, Marszakled confirms:
“The funds were not in danger of being lost. The system would not allow us to send money somewhere where it cannot be recovered. Their allegations have no substance.”
Specifically, Marszalek speaks to critics of Crypto.com, saying that he looks forward to proving them wrong not only with words, but more importantly with actions.
Marszalek also clarified that Crypto.com has 70 million individual customers around the world and realized revenues of $1 billion in 2021 and 2022.
Moreover, it is important to note that the panic over Crypto.com has come at a time when the cryptocurrency market is already on edge, with the collapse of FTX last week. In fact, the FTX exchange went from being one of the world’s largest exchanges to declaring bankruptcy.
Crypto.com: some interesting facts about the global behemoth exchange
Crypto.com has a peculiar history behind it. Indeed, before being among the top ten exchanges by revenue globally, albeit smaller than FTX and market leader Binance, the platform made headlines in 2021.
Specifically, after signing a $700 million deal to rename the Staples Center in Los Angeles as the Crypto.com Arena. The home of the Lakers, in fact, changed its name in favor of Crypto.com in the most lucrative “naming rights” deal in the history of American sports.
The Singapore-based cryptocurrency company was founded in 2016 and has always been a big investor in sports, particularly in recent years. Indeed, Crypto.com has signed deals with Formula 1, the UFC, the Italian Serie A soccer league, Paris St. Germain and the NHL’s Montreal Canadiens, as well as appearing on the Philadelphia 76ers jersey.
All of this has helped increase the prestige of one of the world’s most famous and reputable exchanges, which, as the CEO pointed out, is certainly not going to collapse now despite the difficulties in the market.
Will Marszalek really be right? Will Crypto.com withstand the harsh crypto winter while remaining unscathed?
This is what is hoped, especially by investors, as Crypto.com, from its founding to the present, has always strived to make crypto more accessible to all. In fact, its goal is to increase the use and spread of digital assets in people’s daily lives.
Hence the partnership with Visa, a global giant in classical finance, with which the creation of crypto debit cards that allow people to pay in crypto by converting coins into classical currencies.
Moreover, despite recent fears, Crypto.com is considered one of the safest, most reliable and powerful platforms on the market, with about ten million users scattered around the world.