KUALA LUMPUR (Nov 14): Customers pulled funds from Crypto.com over the weekend after the company’s chief executive said the cryptocurrency exchange mishandled a roughly US$400 million transaction.
In a report on Sunday (Nov 13), the Wall Street Journal (WSJ) reported that Crypto.com chief executive Kris Marszalek said on Twitter the transfer was sent to the wrong type of account on another exchange.
It said the transfer of a large chunk of ether, a popular cryptocurrency, took place on Oct 21, but came to light after Twitter users flagged the transfer as unusual, based on publicly available blockchain transaction records.
Concerns about Singapore-based Crypto.com spread across the internet over the weekend, with prominent digital-currency figures taking aim at the company.
Cryptocurrency traders are on edge following the quick collapse of FTX, which went from one of the most trusted exchanges to bankrupt in the course of a week.
WSJ said Changpeng Zhao, chief executive at Crypto.com’s larger peer Binance, appeared to question the nature of the transfers without naming the company, which may have fueled Sunday’s withdrawals, according to crypto industry players.
“If an exchange [has] to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems,” Zhao tweeted Sunday.
The value of Crypto.com’s own cryptocurrency sank roughly 20% Sunday from the prior 24 hours. It traded near six cents apiece.
Marszalek dismissed the concerns about Crypto.com, tweeting later on Sunday that the October transfers had “generated so much [fear, uncertainty and doubt] & speculation on Twitter” weeks later.
A spokesman for Crypto.com said that the platform was seeing higher levels of activity, noting that it had assets fully matching customer deposits.
“Fluctuations in deposit and withdrawal activity does not affect our levels of service,” he added.