The Block: Crypto.com accidentally transferred $400 million worth of ETH to another exchange, CEO says

Crypto.com mistakenly sent more than 320,000 ether ($400 million) to a rival crypto exchange called Gate on Oct. 21. This was revealed today after a Twitter user posted a screenshot inquiring why a large amount of ether had suddenly moved out of Crypto.com a few weeks ago.

The firm’s CEO, Kris Marszalek, replied to the tweet, saying that the transfer was a result of human error. Marszalek said someone on his team had erroneously sent about 80% of the ether in their reserves to a "whitelisted exchange.” The funds had been scheduled to move to a new cold storage wallet, he said.

"It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address. We worked with the Gate team and the funds were subsequently returned to our cold storage," Marszalek said .

Marszalek added that all of the ether was recovered.

"The ETH transfers were made over three weeks ago, on October 21st to Crypto.com’s whitelisted corporate account at Gate. Crypto.com proceeded to withdraw the funds back to its cold wallets over the following days, a spokesperson from the exchange told The Block in a statement. "The entirety of ETH was successfully withdrawn by Crypto.com and returned to our cold storage."

The incident comes at a time when trust for centralized exchanges has declined in the wake of the collapse of FTX and users are increasingly scrutinizing how exchanges manage their funds.

Still, this was not the first time Crypto.com has made such an error. Last year, a Crypto.com employee erroneously transferred more than $7.1 million to a customer. Later, the firm sued the person for the return of the funds.

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