The set of events that transpires sure leaves a lot of questions unanswered. Let us see if we can find answers to match.
This is nothing that can be proven at this time. But the set of events that transpires sure leaves a lot of questions unanswered. Let us start asking them and see if you can make up your mind.
This little snafu, or whatever it is you would like to call it happened on October 21st. 320,000 $ETH, around 400 million, was accidentally sent to the wrong address by Crypto.com. But all is well as the funds were returned just a few days later on October 29.
Crypto.com´s CEO confirmed that the crypto was supposed to be sent to their new cold storage. But was accidentally sent to the exchange Gate.io. This was, in fact, the second time this type of thing has happened for Crypto.com. And as with most things in crypto, the second time was way bigger than the first. The first time they accidentally send $10.5 million $AUD to a woman who was due for a $100 refund.
But, and I guess you sort of were expecting a but at this time. And I would argue there is a big but, elephant size, to be specific. If we take a look at the timeline for the transaction, we see that the funds were sent on October 21st to Gate.io, a rival crypto exchange. And the funds were returned on October 29th.
But there was something else that needs to be added to that timeline. The thing that needs to be added was the Proof of Reserve report for $BTC and $ETH on Gate.io. This report was generated on October 28. One day before the funds were sent back from Gate.io to Crypto.com.
This looks to be very reminiscent of how you could start businesses back in the 80ies. Borrowing money, showing it as capital, then sending it back. A similar thing apparently is taking place with foreign exchange students. They borrow funds to be able to prove they have the means to be able to live in Sweden. But then end up being forced to work low-paying jobs in order to make ends meet. Being used by unscrupulous employers, yes, we got them in Sweden as well.
The biggest question for me now is are the exchanges closing ranks in the wake of the FTX crash. Making sure they do not loos anymore during the rest of the bear market? In the wake of the FTX crash, basically, all the exchanges have scrambled to show their Proof of Reserve. Seeing that as a way to be able to ensure their customers their crypto is safe with them. This means that if they would unable to do so it would basically mean the death of that exchange.
The second question I have is just how Incompetent is Crypto.com. If this indeed was an error made on their part. This is the second time it has happened to them. This time they sent 82% of their $ETH. This transaction also means that whatever safties they put in place after the first one was far from adequate. And it either speaks to incompetence or them being extremely carefree with other people’s crypto. Because if push comes to shove, there is no doubt in my mind who would have been fitting the 400 million bill for that mistake.
The last remaining question is if you were able to get the answers you needed. Please let me know what you think about this in the comment section down below. If you did, please consider following me or reading my other posts, or why not do both?
See you on the interwebs!
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