The bitcoin price has fallen to lows not seen for two years, wiping out all of its Covid-era gains, and erasing more than $200 billion from the combined price of bitcoin, ethereum and others (despite JPMorgan making a big bet on crypto).
Now, the chief executive of the world’s largest bitcoin and crypto exchange Binance, Changpeng “CZ” Zhao, has said the FTX fallout could be about to hit another crypto exchange, warning of “clear sign[s] of problems.”
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“If an exchange [has] to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems,” CZ posted to Twitter in the aftermath of Crypto.com accidently transferring more than 300,000 ethereum, worth $360 million, off its exchange. “Stay away.”
Explaining the late October transfer to crypto exchange Gate.io, Crypto.com chief executive Kris Marszalek said the mistake was rectified and new processes would prevent it from happening again.
“It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address,” Marszalek posted to Twitter. “We worked with Gate team and the funds were subsequently returned to our cold storage. New process and features were implemented to prevent this from reoccurring.”
Following the collapse of FTX this week, crypto exchanges have come under pressure to reassure users and investors they have the funds to match customer deposits.
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Crypto.com joined others in saying it will publish an audited proof of reserves. “We share the belief that it should be necessary for crypto platforms to publicly share proof of reserves and Crypto.com will be publishing our audited proof of reserves,” Marszalek posted on Thursday.
The price of Crypto.com’s exchange cryptocurrency cro, designed to ease the flow of funds on the platform, has crashed by around 50% this past week.
Liquidity concerns over FTX’s own exchange cryptocurrency FTT triggered a bank run situation last weekend after Binance’s CZ said he planned to offload some $500 million worth of FTT. FTX founder Sam Bankman-Fried, who has now resigned as chief executive, said the exchange was hit with $6 billion worth of withdrawal requests in just one day.