While ecosystem trust in centralized platforms is at an all-time low, we learn that Crypto.com mistakenly sent 320,000 ETH to Gate.io last October. It was about $410 million at the time.
Crypto.com mistakenly transfers 320,000 ETH to Gate.io
It must be assumed that 2022 is marked by the lack of seriousness on the part of certain platforms. After the questionable actions of FTX and Celsius leading to their bankruptcy, we learn that nearly a month ago, Crypto.com made the mistake of sending 320,000 ETH from its reserves to the Gate.io exchange.
In fact, even though this case comes out today, the operation dates back to last October 21st and all funds have since been recovered according to Crypto.com CEO Kris Marszalek:
The ETH transfers that generated so much FUD and speculation on Twitter today were made more than three weeks ago on October 21st to the authorized corporate account of https://t.co/pFc4Pz9nFR at https:// t.co/Mr9GCkL2gV.
—Chris | Crypto.com (@kris) November 13, 2022
The Crypto.com executive explained that it was due to an error when moving to a new storage address, because the company has a company account on Gate.io. This address would actually be part of a platform-owned wallet whitelist:
“In this particular case, the whitelisted address belonged to one of our corporate accounts on a third-party exchange rather than our cold wallet. We have since strengthened our process and systems to better handle these internal transfers. »
For his part, Changpeng Zhao, CEO of Binance, he didn’t fail to react whereas there was a problem if an exchange moved large amounts of cryptocurrency before or after revealing its address:
If an exchange needs to move large amounts of cryptocurrencies before or after proving their wallet addresses, that’s a clear sign of trouble. Stay away. To remain #SAFU. 🙏
— CZ 🔶 Binance (@cz_binance) November 13, 2022
👉 To go further: Take back control of your cryptocurrencies with Ledger keys
The French unicorn of crypto wallets 🔒
A complete crypto experience, from purchase to protection
Never two without three?
Not only does this mismanagement have the merit of being underlined by the amount involved, approximately $410 million at the time of events, but also because this is the second time (at least officially) that Crypto.com has made such a mistake. And for good reason, the exchange had already mistakenly transferred $10.5 million to a user in May 2021.
If “to err is human”, however, note that we are talking about an international level platform with several billion dollars under managementnot a beginner with a few hundred dollar wallet.
As for this case, it was not officially specified whether it was client funds or corporate cashalthough the address in question suggests that these ETH actually belonged to the users.
To a lesser extent, we can also question whether Crypto.com, which acts as a trusted third party with investors, keeps part of its reserves with another trusted third party. Indeed, in the event of failure, this increases the risk of contagion.
If this event has fortunately it did not cause serious consequencesresurfaces in a context which, with the FTX affair, does not help regain the trust of the ecosystem in centralized platforms.
👉 Also in the news: FTX files for bankruptcy and Sam Bankman-Fried steps down as CEO
Join the experts and a premium community
Invest in your cryptocurrency knowledge for the next bullrun
Receive a roundup of cryptocurrency news every Monday by email 👌
What you need to know about affiliate links. This page features investment related goods, products or services. Some links in this article are affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus using our links.
Investing in cryptocurrencies is risky. Cryptoast is not responsible for the quality of the products or services presented on this page and cannot be held responsible, directly or indirectly, for any damage or loss caused as a result of using a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
MFA recommendations. A high return is not guaranteed, a product with a high return potential carries a high risk. This risk-taking must be in line with your project, your investment horizon and your ability to lose some of these savings. Do not invest if you are not ready to lose all or part of your capital.
Read more on our Financials, Media Transparency and Legal Notices pages.