Three brokers are suspected of falsifying proof of reserves: “pull everything up”

The collapse of the FTX is leaving investors on high alert, with many wondering which exchanges are insolvent and which ones will fail next. Recent events have put three companies in their sights, with users withdrawing funds from the platforms for fear of losing their cryptocurrencies.

When FTX turned out to be an insolvent company, several experts started charging other platforms to prove their reservations. Thus, several exchanges started publishing their cryptocurrency addresses.

In the middle of the process, the brokers Huobic🇧🇷 gate.io and crypto.com were accused of falsifying their reservations to deceive their users.

Rumors started when a Twitter user discovered that Crypto.com had sent 320,000 Ethereum units to a Gate.io wallet.

Under pressure from users, the company’s CEO took to Twitter to try to clarify the situation, saying he had sent the assets to the wrong wallet.

Crypto.com and Gate.io

As reported by live coinscrypto.com customers were frustrated with the situation, demanding transparency from the company and warning that they were withdrawing funds from the platform.

“It was going to be a move to a new (offline) cold storage address, but it was sent to a brokerage address on our whitelist. We worked with the Gate.io team and the money was returned to our wallets.” 🇧🇷 said the CEO.

With the situation, several experts announced that they will stop using Crypto.com, with popular influencer Ben Armstrong (BitBoy) warning that he would withdraw all his assets from the platform and advised his followers to do the same.

He says the recent collapse of FTX has taught him the importance of self-determination.

“I just withdrew all my money from crypto.com. I don’t necessarily think there’s anything wrong with @cryptocom… but if you haven’t learned the importance of self-determination, there may be no hope for you. They are not your keys, they are not your cryptocurrencies”

Binance CEO Changpeng Zhao (CZ) also spoke on the matter, saying that an exchange moving large amounts of cryptocurrencies before or after proving its reserves is a “clear sign of trouble”.

The CEO of Crypto.com criticized the insolvency rumors, saying people should focus on companies associated with FTX.

“It’s getting tiresome to respond to nonsense rumors from anonymous accounts citing anonymous sources. People should use some basic logic: Which companies had ties to FTX? These may be affected by this event.” 🇧🇷 said the CEO of Crypto.com

Meanwhile, a user has posted on Twitter that he is no longer able to withdraw USDT funds from gate.io. and recommends his followers to withdraw funds from the platform immediately.

Although the information was not reported by more users, others prefer to hold themselves back by withdrawing money from the exchange before it is too late, after all, 2 days before it went bankrupt, FTX gave its word that it was solvent and several users believed it.

“Take your money from Gate.io and Crypto.com, no FUD, but you better be safe.”

Another user later said that Crypto.com is likely one of the victims of FTX, which sent $1 billion to the company before the insolvency crisis.

The company’s CEO replied that the information is incorrect, but said he had at least $10 million in FTX.

“We have minimal exposure to FTX (less than $10 million) and we only use it as a trading platform to protect customer transactions. We never put in capital for income with FTX or third parties.” — said the company’s CEO in a tweet.

He went on to say that Coinbase, the largest cryptocurrency exchange in the United States, also holds funds in FTX.

“It’s worth adding that Coinbase has $15 million in FTX for exactly the same reason. Some of the FTX-related tokens (SRM, RAY or as Crypto Twitter called them Sam’s Coins) only had decent liquidity on FTX .

Kris Crypto.com
Kris Crypto.com

Huobic

According to Chinese journalist Wu Blockchainafter Huobi disclosed its reserve wallets, 10,000 units of Ethereum were transferred from the company’s quoted wallet to Binance and OKX wallets.

So Huobi’s wallet, which had more than 14,000 Ethereum at the time of publishing the reserve report, now only has 4,004 ETH.

After being questioned by users, the company said some of the disclosed funds were in hot wallets and guaranteed to hold the reserves.

“Huobi guarantees the safety of users’ assets and 100% redemption and will not impose any restrictions on users’ deposits and withdrawals.” – said the company.

While there is no concrete evidence that the three exchanges are insolvent, users do not want to wait. Withdraw money as long as you can until the situation is fully clarified.

The ripple effect of FTX has shaken the confidence of users in the companies, who now have to prove that they are serious and will not disappear with money from customers.

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Source: Live Coins

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