Crypto.com recently addressed public concerns about the financial health of the crypto-currency exchange after the collapse of rival FTX.
According to Crypto.com CEO Kris Marszalek, the Singapore-based exchange recovered $1 billion in digital currency from FTX before its bankruptcy. However, Marszalek added that Crypto.com lost $10 million in exposure as a result of FTX’s collapse. In addition, he explained that the exchange hedged some of its customer orders with Sam Bankman-Fried’s ill-fated business for liquidity reasons. According to Marszalek, FTX was one of the few exchanges with decent liquidity at the time.
Crypto.com continues to set the record straight on the FTX fallout
Kris Marszalek’s recent comments clarifying Crypto.com’s financial situation come after reports on social media suggested that the company had lost $1 billion to FTX. There was also an earlier investor concern about a $400 million Ether transfer to another exchange, Gate.io, on October 21. In response, Crypto.com’s CEO said the Gate transfer was due to human error and that all funds have since been recovered. Kris Marszalek explained that a collaboration with Gate’s team ended with the funds being reversed. He also suggested that Crypto.com would continue to use its track record to prove opponents wrong:
“We are going to prove them wrong by our actions. We will continue to operate as we always have. We will continue to be the safe and secure place where anyone can access crypto.”
Earlier reports also indicated that Crypto.com saw a spike in withdrawals after Marszalek’s comments about accidentally transferring Ether.
In a live-streamed YouTube session, Kris Marszalek responded to reports that Crypto.com had lost funds:
“At no point did the funds risk being sent somewhere we couldn’t recover them. This happened over three weeks ago. This has nothing to do with the craziness that has occurred since the FTX collapse.”
Kris Marszalek also noted that Crypto.com has a revenue of $1 billion between 2021 and 2022. In addition, the company’s CEO also stated that it was not engaging in any “irresponsible lending product“. The crypto-currency exchange plans to have an external audit report in the coming weeks. This report should prove its financially sound balance sheet.
The FTX Crash
The crypto market is still reeling from the dramatic collapse of FTX, once the world’s second largest exchange. Last week, the company filed for Chapter 11 bankruptcy protection in the United States, and Bankman-Fried resigned as CEO.
FTX’s financial turmoil shocked investors because it occurred in record time. Indeed, just a week ago, the company was valued at $32 billion and seemed to be doing just fine. However, a series of allegedly untimely and ill-informed decisions by its executives triggered a massive wave of customer withdrawals from the stock market. This deluge of withdrawals left FTX needing at least $8 billion in funds to stay afloat.