Is the upcoming Crypto.com exchange in trouble? 400 million in Ethereum to the wrong address

Crypto.com exchange sent $500 million worth of Ethereum to the wrong recipient address. Just call the insurance?

Fortunately, the receiving address belongs to Gate.io and the money has already been recovered. Still, Changpeng Zhao (CZ), president of competitor Binance, says users should stop using Cyrpto.com.

No more trust in crypto exchanges

The unprecedented collapse of FTX, once the third largest cryptocurrency exchange in the world, has led many in the cryptocurrency industry to raise concerns about the reliability of centralized operations.

Confidence has plummeted to zero, yielding two silver liners. The first is that we expect many to gamble less and educate themselves about bitcoin. Second, cryptocurrency exchanges feel compelled to open up. This is called booking receipt.

320,000 Ethereum to the wrong address

Crypto.com is one of the exchanges that has published its addresses and shows how many and which cryptocurrencies it stores on behalf of its customers. Shortly after the information was released, however, it was discovered that 320,000 Ethereum had been sent from one of the exchange’s addresses.

This was equivalent to about 80% of the ETH stored on CryptoCom. At the current price of Ethereum, that is 400 million euros.

It soon became apparent that this 320,000 Ether had been sent to a Gate.io wallet address on October 21, 2022. This must have been a mistake, especially since Crypto.com claims to store its coins in ways that are not connected to the internet. This solution is provided by Ledger.

Ether restored, ‘nothing wrong’

Crypto.com CEO Kris Marszalek says the transaction was a mistake. “It was going to be a move to a new cold storage address, but it was sent to an external address on a whitelist exchange.”

“We worked with the Gate team and the money was returned to our meat processing plant. New processes and features have been implemented to prevent repetition.’

Afterwards, Marszalek said that everything was fine and that his exchange was working well. We’ve heard it before, both from Sam Bankman-Fried just before FTX went bankrupt and from the orchestra that played on Titanic.

The crypto community has wondered how it is possible to accidentally send 400 million to the wrong address.

10.5 million for satisfied customers

It is not the first time that Crypto.com has made such a mistake. In August, the bag made headlines after it was revealed that she had accidentally paid $10.5 million to an Australian woman.

What went wrong? The customer was entitled to a refund of “only” 100 Australian dollars. This incident happened in May 2021 but was not noticed until later in the year.

Binance takes on the competition

Meanwhile, Binance CEO CZ sees his chance. He was clearly involved in the FTX drama and now seems to be an authority on dodgy exchanges. A wonderful feature if you manage a cryptocurrency exchange yourself.

He advises to stay away from Crypto.com.

“If an exchange has to move large amounts of crypto before or after showing their wallet addresses, it’s a clear sign of trouble. Stay outside. Stay SAFU,’ he said.

Source: Btc Direct

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