The crypto exchange Crypto.com CEO dismisses liquidity and financial trouble speculation and assures that the company’s balance sheet is strong.
“Crypto.com is sitting on plenty of our own capital held in USD and stablecoins above the 1:1 reserves we keep for client funds,” says CEO Kris Marszalek in a Tweet.
As mentioned in my CNBC interview yesterday, https://t.co/pFc4Pz9nFR is sitting on plenty of our own capital held in USD and stablecoins above the 1:1 reserves we keep for client funds. https://t.co/8ipDou3JxK
— Kris | Crypto.com (@kris) November 16, 2022
Kris was responding to Cryptoquant’s on-chain data, which stated that within 24 hours, Crypto.com had minted a total of 260 million $USDC from Circle, increasing their stablecoin reserve to $500 million despite the recent large outflow.
Kris reaffirmed in a recent CNBC interview that the exchange has a strong balance sheet and that its exposure to FTX is limited to $10 million, down from a possible $1 billion in business the two exchanges had previously.
The CEO of the Singapore-based exchange also claims that the exchange has never used its native currency, Cronos (CRO), in the same way, that FTX used FTX Coin (FTT), including making questionable decisions such as using it as collateral. Kris’ comments come amid growing concerns about Crypto.com’s insolvency.
In the aftermath of the FTX collapse, Twitter erupted over the weekend with speculation that Crypto.com was facing similar problems. Meanwhile, it was revealed on Sunday that Crypto.com sent more than 80% of its ether holdings, or approximately $400 million in cryptocurrency, to Gate.io, another crypto exchange, by mistake in October.
In a tweet, Marszalek stated that the company was supposed to send 320,000 cryptos to one of its offline wallets but accidentally sent it to a “whitelisted” address belonging to the corporate account at Gate.io.
However, Kris commented in the CNBC Squawk Box episode:
We’ve never utilized it in the way that FTX did – we never used it as collateral for any loans or anything. We run a very simple business. We are a regulated business – we’ve got licenses in all major jurisdictions,
He also stated that, despite being launched by Crypto.com, Cronos is still an open-source, decentralized project with approximately 400 projects currently built on it.
Kris noted that their mode of operation differs significantly from that of FTX, highlighting their licenses of operations as opposed to FTX’s unlicensed derivatives exchange and hedge fund operation.
Crypto.com’s CRO token has dropped nearly 45% in the last week on fears that the exchange will be the next to face a liquidity crisis.
