Crypto.com delivers 320k ETH to Gate.io, then recovers it
Crypto.com’s CEO verified the recovery of the assets and promised investors new procedures and features would prevent a reoccurrence.
The demise of FTX underlined the necessity of proof of reserves in avoiding dangers and enhancing investor trust, prompting prominent crypto exchanges to reveal their cold and hot wallet addresses. Cold storage information indicated a suspicious transfer of 320,000 Ether while checking Crypto.com funds.
Community member jconorgrogan highlighted concerns over the transfer of 320,000 ETH from Crypto.com’s cold wallet to Gate.io, as the former states that 100% of user-owned coins are stored offline in cold storage with Ledger.
As arguments heated up, Crypto.com CEO Kris Marszalek announced that 82% of the company’s ETH in cold storage was transferred to Gate.io: It was meant to go to a new cold storage address but went to a whitelisted external exchange address.
Crypto.com’s whitelisted Gate.io address is theirs, a representative told Cointelegraph. Gate.io restored the cash to Crypto.com’s cold storage, and Marszalek informed investors that new procedures and measures were deployed to avoid a reoccurrence.
Gate.io refunded 285,000 ETH to Crypto.com, although Marszalek said all monies were returned. The lost 35,000 ETH was transmitted to a different address, which the crypto exchange hasn’t validated.
Marszalek subsequently tweeted what happened and that Crypto.com was operating properly. This isn’t Crypto.com’s first unintentional transfer. In August 2022, Crypto.com gave Melbourne-based investors AUD $10.5 million (worth over $7 million), which was intended to be AUD $100 ($67). May 2021 event wasn’t noticed till December 2021 audit.
Marszalek vowed to disclose Crypto.com’s audited proof of reserves on November 10, emphasizing openness and user safety.
With most crypto firms sharing proof of reserves, investors may authenticate the presence of their cash, preventing company owners from abusing cold storage funds.