The fallout from the collapse of cryptocurrency exchange FTX.com kept bitcoin and other cryptocurrencies under pressure yesterday, with market participants worrying about heavy withdrawals at Singapore-based exchange Crypto.com.
Crypto.com announced on Twitter that CEO Kris Marszalek would go live on YouTube to answer questions about some transactions on the platform that had sparked speculation and fund withdrawals.
“A lot has happened in the last week and there are a lot of questions which we want to address,” the exchange said.
Photo: AFP
The questions around a transfer of a big chunk of ether tokens last month from Crypto.com to another platform were raised by a user who dug through transactions after the company posted its cold wallet addresses online.
While Marszalek wrote on Twitter that the ether, worth about US$400 million, had been accidentally transferred and was recovered, his comments failed to allay concerns in a market already on edge after the spectacular public collapse of FTX last week.
The Wall Street Journal reported that withdrawals at Crypto.com rose over the weekend after Marszalek’s statement.
Twitter users pointed to other transfers between some other smaller platforms and exchanges as possible evidence that they were leaning on each other to shore up reserves.
Bitcoin slid further to below US$16,000, taking losses for the month to 22.5 percent, while FTX’s token was at US$1.60 and down 94 percent this month. Crypto.com’s token Cronos has halved in the past week to US$0.06.
“Trust is at a massive premium because of the transparency or lack of it in this industry. How do you assess which exchange to trust at the moment?” said Leonard Hoh, the Singapore-based Asia-Pacific general manager of exchange BitStamp.
“In reality, all firms are being tested on their ability to meet their obligations and compliance controls,” Hoh said. “The market is asking for real proof, rather than assuming parties have been acting in good faith.”
Crypto.com is among the top 10 exchanges by turnover globally, but smaller than FTX and market leader Binance Holdings Ltd (幣安). It made headlines last year after it signed a US$700 million deal to rename the Staples Center in Los Angeles as the Crypto.com Arena, and got actor Matt Damon to promote the platform.
Meanwhile, the effects of the collapse of Bahamas-based FTX, which filed for bankruptcy on Friday after a rush of customer withdrawals and a failed rescue deal with rival exchange Binance, continued to affect markets.
Bahamas securities regulators and financial investigators are looking for potential misconduct over the collapse of FTX, the Royal Bahamas Police Force said on Sunday.
AAX, another cryptocurrency exchange, had halted withdrawals, Bloomberg reported.
Visa Inc, the world’s largest payments processor, said on Sunday it was severing its global credit card agreements with FTX.
Binance CEO Changpeng Zhao (趙長鵬) wrote on Twitter that the exchange had never short-sold FTT tokens.
Zhao abandoned a deal with FTX chief Sam Bankman-Fried last week to buy FTX’s non-US assets, precipitating the bankruptcy.
He has since warned of a “cascading” cryptocurrency crisis, and yesterday called for clearer industry regulation.
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