Crypto.com has admitted that it made another very big and very serious mistake: about three weeks ago, it mistakenly sent 320,000 Ethereum (~ $416 million) to another a cryptocurrency exchange called Gate.io.
In his post on Twitter, Crypto.com CEO Kris Marszalek reported that the company was supposed to send the cryptocurrency to one of its cold, or offline, wallets, but accidentally sent it to a “whitelisted” address belonging to its enterprise account on Gate.io.
All this happened after Marszalek posted addresses of the company’s cold wallets to ensure transparency of what the exchange does with its funds. After examining Crypto.com transactions, one user, Conor Grogan, noted that on October 21st, the exchange sent 320,000 Ethereum to Gate.io, representing about 80% of the company’s Ethereum holdings.
Later, Marszalek added that he managed to return the “entire volume” of transferred assets. Twitter users confirmed that Crypto.com got their funds back about a week later by transferring 285,000 Ethereum (~$350M) to one wallet and putting the remaining 35,000 Ethereum (~$43M) into another. Gate.io also published a response, stating that it began issuing refunds as soon as it became clear that the transfer was an “operational error”. But, at least this time, Crypto.com did get a refund. In August, due to an unfortunate mistake, Crypto.com paid a customer $7.2 million instead of $68.
Despite Marszalek’s assurances that that “all systems are working fine”, this event prompted withdrawals from the platform as users begin to worry whether Crypto.com will suffer the same fate as bankrupt FTX and other firms. Some users assume that the transfer was made in order to change the proof of reserves that numerous cryptocurrency exchanges promised to provide in response to the FTX crash.