- Crypto.com has announced that Meme coin SHIB accounts for 20% of its reserves.
- There were supposed to be 35,000 ETH sent to Gate.io, but the exchange hasn’t said what happened to them.
- Users of the exchange have started making withdrawals.
During the FTX crash, Crypto.com made headlines when it said that 20% of its holdings were in the Shiba Inu (SHIB) token, a very risky “meme coin.” This led to Crypto.com coming under fire. The reports were published in an effort to increase communication between the platform and its users during the recent cryptocurrency market crash.
According to Nansen, 20% of all assets in Crypto.com wallets, or nearly $558 million, are in SHIB. The only thing the exchange owns that is more valuable than SHIB is Bitcoin, which is worth $872 million. Also, the total amount of SHIB held is far in excess of the $487 million in ether currently in circulation (ETH).
Crypto.com’s spokesperson elaborated on why the exchange keeps so many of a potentially volatile token in stock.
Since we keep customer balances at a one-to-one ratio, Shiba is included in our Proof of Reserves. As a result, customer balances determine how much we have to show as Proof of Reserves.
SUSPICIOUS TRANFERS
Amidst these disclosures, Twitter user @jconorgrogan raised concerns about a suspicious transfer of 320,000 Ether from Crypto.com to a wallet address linked to Gate.io on October 21, 2022. Given that Crypto.com says it keeps all user funds offline in “cold storage,” this development was cause for alarm.
CEO of Crypto.com Kris Marszalek claims the transaction to Gate.io was made inadvertently. Following the hack, Marszalek assured investors that their funds had been returned to cold storage at Crypto.com and that new procedures and safeguards had been put in place to prevent a repeat.
Marszalek’s claim is backed up by blockchain data, but he only got some of his money back. From what we can tell, Gate.io only returned 285,000 ETH to Crypto.com. Inspection revealed that the 35,000 ETH had been moved to a different wallet address, which the exchange has yet to confirm.
Investors Pullout
As a result of recent events, many Crypto.com customers have been reluctant to keep their money on the platform. Ben Armstrong, a prominent cryptocurrency commentator, cashed out along with the rest of the crowd.
Just now, I withdrew the entirety of my savings from https://t.co/hKkLMzo7Sl. In and of itself, I don’t see a problem with @cryptocom… However, there may be no hope for you if you haven’t realized the value of self-custody by now. Neither your private nor public cryptographic keys
The following was written by Ben Armstrong (@Bitboy Crypto) on November 13, 2022.
The post Crypto.com Comes Under Fire Over MEME Coin Reserves and Suspicious ETH Transfer appeared first on Coin Edition.
Disclaimer: This isn’t financial advice; it’s just for education. Crypted Crypto can’t guarantee its accuracy. Every investment and trade carries some risk, so always do your own research. Invest only what you can afford to lose.
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