Since the bankruptcy of FTX, the CEO of Crypto.com has been trying to reassure investors about the resilience of his platform, to no avail.
The bankruptcy of FTX has major consequences for the model of centralized trading platforms (exchanges). More suspiciously, many users have decided to take their cryptocurrencies off their platforms to place them on wallets (Ledger type hot or cold wallet) to secure them. This happened on many exchanges and especially on Crypto.com.
“A very solid balance sheet”
According to specialist site Nomics, which analyzes real-time data on stock exchanges, the Daily Volume Crypto.com fell from $5 billion a day last May to about $300 million today. To reassure investors, Crypto.com has “a very solid balance sheet”, assured his boss during a live streaming.
The fact remains that since the disclosure of FTX’s financial arrangements, mainly executed through the house token (FTT) without much of a backlog as a counterpart, we want to know what these platforms are based on. For now, however, this remains difficult, despite giant Binance’s proposal to make the platforms more transparent about their portfolios, as most of them are unlisted companies and are therefore not subject to the transparency obligation.
However, an unofficial audit shows that Crypto.com relies in part on a highly speculative cryptocurrency, the shiba, a cryptocurrency of the same ilk as Dogecoin, the cryptocurrency with the head of Elon Musk’s favorite dog. It appears that of the $2.88 billion in total assets in Crypto.com’s wallets, about $558 million, or about 20%, is in the shiba cryptocurrency.
“The reason our Proof of Reserves includes Shiba is because we hold our clients’ balances 1:1. So our Proof of Reserves is determined by our clients’ assets,” a Crypto.com spokesperson told CoinDesk. “In an ideal world, we would want the best assets to be worth the most, but shiba and dogecoin both have extremely high market caps,” he added.
Additionally, CNBC reveals that the previous company Kris Marsalek worked for in Australia, an online shopping platform, abruptly shut down in 2016, leaving all of its active customers on the floor. All this creates problems and now Crypto.com, which sponsors the floor of the Lakers team in Los Angeles, among other things, is clearly in the crosshairs.