Sending $400 million worth of Ether to the wrong wallet is not the best way to build consumer confidence when trust in cryptocurrency exchanges is at a post-FTX low. Withdrawals reportedly rose and Crypto.com’s Cronos token fell.News of Crypto.com’s $400 million “oopsie” couldn’t have come at a worse time.
While it happened last month, news only broke over the weekend that the high-profile exchange accidentally sent $400 million worth of Ether to competitor Gate.io after mixing up one of its own corporate account wallets on that platform with a new Crypto.com cold wallet.
Coming as trust in centralized exchanges has been badly damaged by the collapse into bankruptcy of FTX and FTX US — as shown by the record number of crypto owners finally heeding long-standing industry advice to self-custody their funds in private cold wallets — the error “generated so much FUD & speculation on Twitter,” according to CEO Kris Marszalek, that he was forced to explain what happened.
In brief, he said in a Nov. 12 Twitter thread that the 320,000 ETH were sent to a whitelisted address in its custody system — just the wrong one:
“Fund movements from Crypto.com custody systems are only possible between approved and whitelisted addresses attached to our cold wallets, our hot wallets and our corporate accounts at 3rd party exchanges […] In this particular case the whitelisted address belonged to one of our corporate accounts in a 3rd party exchange instead of our cold wallet.”
(Source: Coinmarketcap)