Crypto.com CEO Kris Marszalek came online to answer pressing questions from the industry after a weekend of simmering in hot water in the wake of FTX's filing for Chapter 11 bankruptcy protection.
After releasing cold wallet addresses for the platform's largest assets in a push to increase transparency on Friday, a user revealed an allegedly accidental transfer of $4 million to a whitelisted external exchange address — which stirred users to withdraw funds.
Other concerns that Crypto.com had sent $1 billion worth of stablecoins to FTX circulated on Twitter — something Marszalek addressed on a YouTube live stream. “Over a year, $1 billion was moved to FTX," they said, reiterating: "We recovered all of this. We only had an exposure of $10 million when FTX shut down."
Marszalek added that the exchange did “hedge some of their customer orders there,” as FTX was “one of the few exchanges with decent liquidity for some of the coins.”
“Those are the facts, and everything else is FUD,” Marszalek said on the video.
Marszalek pointed out that Crypto.com generated $1 billion in revenue over 2021 and 2022. They also said an external audit report should be expected in the coming weeks — to prove Crypto.com has “full one-to-one reserve coverage."
“The platform had about US$1 billion in cumulative transactions with FTX over the last year but current exposure was less than US$10 million, he said.”
Update: Marszalek clarified in a response to The Block on Twitter that "the platform had about $1 billion in cumulative transactions with FTX over the last year but current exposure was less than $10 million." Adjusted headline to reflect Marszalek's response.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.