Crypto.com CEO Says ETH Worth $300M Transferred 'Erroneously,' Binance's CZ Tweets 'Clear Sign Of Problems'

Crypto.com erroneously sent more than 320,000 Ether ETH/USD worth around $400 million to competing cryptocurrency exchange Gate.io, on Oct. 21, according to the company’s CEO.

This information was made public today after a Twitter user shared a screenshot asking why a significant amount of Ether had mysteriously left Crypto.com a few weeks ago.

Crypto.com CEO Kris Marszalek responded to the tweet by claiming that a human error led to the transfer.

According to Marszalek, someone on his team unintentionally sent 80% or so of their ether reserves to a "whitelisted exchange."

He said that the money was supposed to transfer to a fresh cold storage wallet.

"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.

All the Ether was recovered, Marszalek added.

Also read: Why FTX's Collapse Is The Crypto Equivalent Of The 2008 Lehman Brothers Crisis

The error occurs at a time when users are closely analyzing how exchanges manage their cash, and confidence in centralized exchanges has decreased following the collapse of FTX.

This is not the first time Crypto.com has erred in the transfer of funds.

Over $7.1 million was unintentionally transferred to a customer by an employee last year.

Later, the company sued the recipient to get the money back.

Community Concerned About Crypto.com's Justification

Crypto.com's justification is being questioned by many in the cryptocurrency industry, who think that the transfers may be related to the exchange misrepresenting its reserve.

The CEO of Crypto(.)com says they accidentally sent $400 million $ETH to the wrong wallet address.

Wildly irresponsible.

Get off these platforms. pic.twitter.com/SABIZPEYWZ

— Dylan LeClair (@DylanLeClair_) November 13, 2022

Meanwhile, Adam Cochran of Synthetix and Yearn Finance emphasized that the CEO should fill in some of the gaps in Crypto.com's proof of assets.

The response of "wait for our audit" is insufficient, Cochran continued.

“If the assets are there, this should be fairly simple to point to even 80% of these assets to assure users in the meantime. Understand people have reason to be concerned and ask questions in this environment,” Cochran said.

Well-known crypto influencer Ben Armstrong (BitBoy) announced that he was removing all of his assets from Crypto.com and encouraged others to follow suit.

He claimed that incidents in the recent past have taught him the value of maintaining self-custody.

Changpeng Zhao, the CEO of Binance, also commented on the incident, stating that it is a "clear sign of problems" when an exchange moves significant sums of cryptocurrency before or after its proof-of-reserve.

The CEO of Crypto.com has denounced the rumors regarding the exchange and suggested that users pay more attention to companies with connections to FTX.

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