The era of centralized exchanges is coming to an end. The firms are slowly hinting at insolvency as rumors surround them. Among them, Crypto.com is one of the exchanges close to bankruptcy, despite the team’s denial. Now, users are rushing to take out their funds from the exchange.
On Friday, FTX saw its demise in the span of two days, costing SBF to lose billions of dollars. Many people had invested their life savings into the firm because of Bankman’s reputation but now they’re left penniless. Ever since this downfall, the trust in centralized exchanges has lifted and many other trading platforms are under fire for hiding their financial statements.
Multiple suspicious movements tracked by various investigating accounts on Twitter show Crypto.com and KuCoin refuse to be transparent about their financial status, close to declaring insolvency. Furthermore, the overall trust in centralized exchanges has increasingly died out and people are actively transferring their funds to self-custody wallets
FTX was more than just an exchange, it had different subsidiaries under it, which are highly affected by its insolvency and are reportedly under threat of dissolution. Other than that, Crypto.com also seems affected by this, as many people assumed, but Kris, the CEO, clarified that their direct involvement in FTX’s downfall is “immaterial,” “less than $10m in our own capital deposited there for customer trade execution,” he added.
Later, on Nov. 11, Kris released the firm’s proof of reserve of cold wallet addresses which shows it holds more SHIB coins than ETH:
The firm came under the radar again when Twitter user @jconorgrogan reported that Crypto.com transferred 82% of its ETH, almost $400M, to Gate.io on Oct. 21 and then Gate.io sent 285k ETH (a lesser amount than sent) to Crypto.com again, causing many speculations that the firm is risking its users’ funds for some unknown reason, to which Kris said it was accidentally sent to a “whitelisted external exchange address.” But the amount being returned by Gate is far less than what was sent, so then what’s the real reason behind this exchange?
Regarding FTX, Crypto.com also sent $1B worth of stablecoins, what’s the reason behind this transfer when the team claims to be not involved with FTX directly?
The platform has now halted its withdrawal operations for customers because of having no ETH gas funds. Why is it that a completely functioning CEX is suddenly pausing its operations without any proper reasoning? Is the firm struggling financially? Or is it simply preventing further loss? Many questions circulate regarding the future of this trading platform.
As a result, almost 90,000 unique transactions have been made as people take out their funds to prevent any financial loss.
Although nothing is certain and no one really knows the truth about whether Crypto.com is really going bankrupt, the FTX downfall has ignited fear among users of them losing money due to insolvency.
Following the sudden withdrawals from users, $CRO, the native coin of Crypto.com, has dropped 19% and is currently trading at $0.05919.
