Crypto.com CEO says withdrawals working, exchange not in trouble

Market


Singapore-based crypto exchange Crypto.com’s chief executive Kris Marszalek said the firm will prove all naysayers wrong on the platform being in trouble, and that it has a robust balance sheet and took no risks.

CEO Marszalek took questions in a livestreaming YouTube address on Monday, and also said the platform always maintained reserves to match every coin customers held on its platform. Marszalek said that withdrawals from the platform are working and will continue to work, moving to reassure markets unnerved by the sudden collapse of rival FTX.com. 

Marszalek, speaking on Monday in a livestreamed Q&A session, repeated that the company has less than $10 million of exposure to FTX and a ‘very strong balance sheet.’ An audited proof of reserves report will be published within weeks, he said, and that the exchange did not engage in any “irresponsible lending products”.

After FTX filed for bankruptcy late last week, markets have turned their attention to the health of other crypto exchanges like Crypto.com. The company’s native CRO token has slumped 45% in the past week, data from CoinGecko show. 

Crypto.com never uses CRO as collateral for loans, Marszalek said. The company, with some 70 million users, has 1-to-1 reserves coverage for all assets and liabilities, he added. 

Sam Bankman-Fried’s FTX filed for bankruptcy on Friday after a week of seeing customers pull assets and Binance abandoned a rescue offer. Bankman-Fried and his company are under investigation by the Department of Justice and the Securities and Exchange Commission. The investigations likely center on the possibility that the firm may have used customers’ deposits to fund bets at Bankman-Fried’s hedge fund, Alameda Research, a violation of the US securities law.

FTX’s bankruptcy marked a stunning reversal for Bankman-Fried. The 30-year-old had set up FTX in 2019 and led it to become one of the largest crypto exchanges, accumulating a personal fortune estimated at nearly $17 billion. FTX was valued in January at $32 billion, with investors including SoftBank and BlackRock. 

Bitcoin dropped 23% last week, its worst tumble since June. The total market value of all tokens has dropped more than 70% from a record peak of just under $3 trillion set a year ago, according to the CoinGecko website, with the current worth of $843 billion.

 

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