Crypto.com Accidentally Sent $400M in Ethereum to Wrong Address, CEO Calls Concerns ‘FUD’

After the shocking collapse of FTX, other centralized crypto exchanges are under the microscope, and Crypto.com customers are concerned after CEO Kris Marszalek acknowledged that his exchange accidentally sent 320,000 ETH, around $400 million at the time, to a public address registered at a competitor exchange. 

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Blockchain records on Etherscan show that on October 21, Crypto.com sent the sum, around 80% of its total ETH reserves, to rival exchange Gate.io—just before Gate.io provided “proof of reserves” to its users on October 28 as part of a new push for transparency after the FTX crisis. 

Gate.io subsequently returned the slightly diminished sum of 285,000 ETH, around $456 million as a result of a minor ETH surge, on October 29. Crypto.com released its own proof of reserves on November 12. 

“It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address,” Marszalek tweeted on Saturday. “We worked with [the] Gate team and the funds were subsequently returned to our cold storage. New process and features were implemented to prevent this from reoccurring.”

Marszalek added that all of the funds have since been returned and that Crypto.com’s dollar balance on Gate is in the single-digit millions. 

Cronos, Crypto.com’s native token, is now down more than 50% for the week, according to data from CoinGecko.

In a thread blasting the resulting speculation as “FUD,” Marszalek shared a snapshot from Gate showing its reserves from October 19 without the Crypto.com funds. Gate also posted on its blog late on Saturday night a “clarification” about its “assistance to Crypto.com to retrieve 320k ETH mistaken transfer.”

Crypto.com and Gate.io did not immediately respond to requests from Decrypt for further comment.

The baffling…