Following the Bankruptcy of crypto exchange FTX, many centralized exchanges have been facing liquidity crunch. The Proof Of Reserves posted by Kris Marszalek, CEO of Crypto.com quoted Shiba Inu coin – [Memetokens] as the second biggest asset on its Proof of Reserves followed by Bitcoin.
The withdrawal queue is down 98% within the last 24 hours.
It remains business as usual at https://t.co/pFc4Pz9nFR.
Kudos to our team who built resilient blockchain infrastructure — operating normally under load.
Onwards!
— Kris | Crypto.com (@kris) November 14, 2022
Ethereum and stablecoins reserve on crypto.com:
- 25-80% of ETH reserves moved four times since Sep 2022.
- Stablecoins reserve decreased from $2.9B to $292M, -90% over the past 7 months.
This situation has opened increased withdrawal pressure on the CEX. Crypto degenerates are skeptical on how illiquid and volatile those digital assets could be.
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Seems like other market actors would like to see Crypto.com implode. I don’t see it happening. On CNBC, Kris noted he is on a mission to prove ‘Naysayers’ wrong. Meanwhile, some crypto users feel CZ-Binance is trying to eliminate competitors, and owing to the growth on $CRO native token of Crypto.com – which some per-mutate as the ‘stabler’.
Due to the insolvency of FTX and Alameda Research, many Centralized Exchanges, including Binance, have put forward a Merkle tree proof of funds to help boost transparency and investors confidence in the Crypto Industry. Yes, that also makes it necessary for us to pay attention to our Cryptocurrency Wallet User Manuals, to understand, if necessary, when to do that trigger.
As part of #Binance's ongoing commitment to transparency, we are sharing details of our hot and cold wallet addresses.
Stay tuned as we will publish a Merkle tree proof of funds within the next few weeks.
More details here ??
— Binance (@binance) November 10, 2022
Etherscan on chain Bloockscript reveals transfer of funds within Crypto.com in an attempt to meet up with the rising standard of Showing Proof of Reserves. Apparently, there’s a conflict of interest in play, Crypto.com sent $1B to SBF ex- CEO of FTX they likely fell victim to the incredibly great APR deception an allegation Kris refuted as false but admitted Crypto.com had a $10Million Exposure to FTX.
This is false. We have minimal exposure to FTX (under US10m) and only used it as a trading venue to hedge customers’ trades. We never deployed capital for yield with FTX or any 3rd party.
— Kris | Crypto.com (@kris) November 13, 2022
Users are worried and want an explanation on what this $1Billion transfer is about and it’s relationship with Alameda Research running up to venting. When you answer “this is false, everything is fine ” and don’t explain, you will get the opposite reaction, SBF, Do Kwon and 3AC also said everything was ‘fine’ but tanked in the end.
2 /
The Etherscan address in the screenshot above is: 0xadd6d754b48a7eb4b4a71651722666093f7bc5d9
Go look for yourself, and if you're a user, withdraw before the withdrawals are disabled. Please spread the word as soon as possible!
— wize (@0xWize) November 13, 2022
Mario Nawfal, said the same auditors behind FTX also approved the “proof-of-reserve” snapshots that are coming under scrutiny at Gate and Huobi Exchanges. These snapshots look to have been fluffed up by wash transactions from crypto.com, who claims that this was a mistake, Hard to believe.
? The same auditors behind FTX also approved the "proof-of-reserve" snapshots that are coming under scrutiny at Gate and Huobi!!
These snapshots look to have been fluffed up by wash transactions from https://t.co/60Vwqt980N, who claims that this was a mistake. Hard to believe.
— Mario Nawfal (@MarioNawfal) November 13, 2022
Proof of Reserves (PoR) is a point in time, hard to verify when it’s a moving target, PoR does NOT cover liabilities. Who knows where these land, verifying C of the liabilities of a CEX is probably really hard to do. Many existing partners do not understand decentralization and blockchain tech, But with key auditing knowledge they know when something doesn’t smell right.
OXFOOBAR tweeted, if crypto exchanges were car repair shops, you’d come back the next day, ask why your car was replaced with three bikes, and the response would be: “this is false. We have minimal exposure to bike shops and have only used them as a trading venue to hedge customer transportation”.
https://twitter.com/0xfoobar/status/1592370702153560064?s=46&t=VpcHJ4oX-yzDqBhCsLyl_g
If Crypto.com will survive through this storm it will be the most trustable centralized exchange after Binance. To fight the FUD, people need the right answers and proof of what is happening with many internal transactions. Currently, $KCS and $CRO are breaking to fresh new lows while $FTT gained +23% from its low of $1.2, guess we’ll see if FTX behavior was isolated or something of a trend.
Meanwhile, Changpeng Zhao in a letter to Staff wrote “People now think we are the biggest and will attack us more,” said the Binance CEO. “We are used to being open and leaning into headwinds. In fact, we embrace scrutiny. We must significantly increase our transparency, proof-of-reserves, insurance funds, etc. A lot more to come in this area.” Because of the FTX and Alameda Research crash, some Crypto enterprises will never remain the same.
In the spirit of transparency, might as well share the actual note, sent to all Binance team globally a few hours ago.https://t.co/IUNkPcLC8T pic.twitter.com/XGlIJB7EV5
— CZ ? Binance (@cz_binance) November 9, 2022