However, he acknowledged that at the time of FTX’s collapse, Crypto.com’s exposure to the crypto platform was less than $10 million. Kris Marszalek also claimed that Crypto.com never used its crypto-currency token as collateral.
Crypto.com’s business model
Kris Marszalek, the co-founder and CEO of Crypto.com, recently told his followers that when FTX collapsed, much of the $1 billion that had been sent to the now-defunct exchange platform had been recovered. According to the CEO, Crypto.com’s exposure to FTX was less than $10 million when it was forced to file for bankruptcy.
Responding to speculation that Crypto.com could be the next crypto-currency exchange to face an FTX-like exodus of users, Kris Marszalek insisted on Nov. 14 that it was business as usual at his company. Speaking at an Ask Me Anything (AMA) hosted by the crypto-currency exchange, Kris Marszalek also reaffirmed that his company’s main goal is to serve its more than 70 million customers who primarily buy and hold crypto-currencies.
The Crypto.com boss also said that his company’s business model is different from the one used by FTX.
Rising transactions and withdrawals end rumors
FTX’s apparent practice of diverting customer funds has finally led to its downfall. Following FTX’s demise, rumors have emerged suggesting that Crypto.com, which recently admitted to mistakenly sending over $400 million worth of digital assets to Gate.io, could be the next crypto-currency exchange to fall.
BREAKING: A potential bank run on https://t.co/SCDLOM8zTW may be in progress.
Nearly 90,000 unique transactions have been processed in the last few hours, suggesting that users are scrambling to get their funds off the exchange 👇#CryptoCom pic.twitter.com/5XRELFgmyC
– The Chainsaw (@chainsawdotcom) November 14, 2022
In addition, the recent rumor in the number of transactions as well as reports alleging that Crypto.com had paused withdrawals seemed to give credence to the rumors. However, in his response to reports suggesting that the exchange had halted withdrawals, Kris Marszalek said:
That is absolutely not true, we are operating as usual. There is an increased level of trading activity, which means higher trading volumes, which means more revenue for us.
Kris Marszalek admitted that the exchange is struggling with a backlog of customer service tickets, but nevertheless stressed that steps are being taken to rectify the situation. Regarding the alleged use of Crypto.com’s CRO token as collateral, the CEO said:
We have never used CRO as collateral for a single loan in our history. Not even once.
Kris Marszalek added that Crypto.com already runs a simple business that generates decent revenue and therefore has no interest in using its token to generate more revenue.