Will Crypto.com be the next thundering platform?

Original author: Jack, BlockBeats

On the day FTX declared bankruptcy, many people realized that FTX’s thunderstorm may have revealed the last fig leaf of encryption institutions. In the past few days, affected by the thunderstorm incident, major trading platforms have been in a hurry to publicly disclose user reserves in order to "prove their innocence." But I didn't expect that the attitude of "there is no silver three hundred taels" put on by the exchanges, now it seems that it has become a bad idea to catch fire.

According to BlockBeats, on November 3, some community users discovered that Crypto.com The platform-related address once transferred about 285,000 ETH to the Gate address of the trading platform in October, and Gate returned it to another Crypto.com address a few days later, but both addresses subsequently appeared in the offline storage users published by Crypto.com In the list of cold wallet addresses of assets. In this regard, its CEO Kris Marszalek tweeted on the same day that the change of the platform’s cold wallet was because the team accidentally sent $400 million in ETH to the wallet address of the Gate.io exchange a few months ago. , and stated that he worked with the Gate team and the funds were returned.

In response to this matter, CZ, who previously "whistleed" the potential risks of FTX, replied again: "It's not safe." As of now, all related tweets posted by Kris on Twitter have been deleted.

On the 14th, it was revealed that Crypto.com had transferred approximately US$1 billion to FTX, and some users claimed that their withdrawal this morning had not yet arrived and was suspected to be frozen . In this regard, Kris immediately said that "we have the smallest exposure to FTX (less than 10 million US dollars), only use it as a trading venue for hedging customer transactions, and never use funds for FTX or any third-party income", and said Crypto.com deposits USDC in FTX to buy other Tokens, and then transfers back to Crypto.com's wallet.

As previously reported by BlockBeats, a total of 120 million USDT was transferred from the Binance hot wallet to the Crypto.com wallet in the past week The capital flow data all occurred before the company announced the cold wallet address. All signs point to possible tricks in Crypto.com's asset disclosure behavior.

As soon as the incident happened, many users also questioned the solvency of the Crypto.com platform , the platform began to appear a certain scale of run phenomenon. At the same time, BitMEX also launched a futures contract for the platform's native TokenCRO. The last time BitMEX did this, it was on FTX and FTT.

For many crypto users in Asia, Crypto.com is a familiar yet unfamiliar name. Its founding team is low-key, but its advertisements are very public. There are many fighting, racing, and ball games. It even invited Hollywood movie star Matt Damon to shoot shocking advertisements. After the issuance of its platform Token CRO, all boats have risen all the way, reaching the peak at the end of last year. It was also during this period that Crypto.com signed a $700 million deal for the naming rights of the Lakers' home stadium.

It can be said that Crypto.com is very popular in Europe and America, and the cooperation with Visa card has made many European and American consumers Investors love the credit card products they launched. However, when we searched for relevant information on the Internet, we did not have many clues, and most of the content was touting contributions or soft articles. Despite the famous name, the Tokens traded on the platform are all little-known "capital disks". Many users don't even know what the main business of Crypto.com is. This encryption exchange seems to be from the beginning, I intend to give up the development of potential user groups in Asia.

Interestingly, the author found out that the CEO of Crypto.com, Kris He is also the CEO of a company called Forres Information Technology. Based in Shenzhen, the company is mainly responsible for the technical development of the product's back end, and its profile directly matches the description of Crypto.com. After lying down in the job hunting community, I found that the company has mixed reputation. As the CEO, Kris looks more like a "brand figure" on the platform in front of the door.

Of course, these are off topic. Going back to the main page of Crypto.com, we will see that the platform provides users with a very high lending rate, which is as high as 8.5% for stablecoins. In the current mainstream encryption exchange model, under normal circumstances, the platform’s asset custody fee should be 0, and at most it will charge a small fee when withdrawing money. So where does such a high platform rate of return for Crypto.com come from? In fact, most of them are subsidies from its CRO Token.

In addition, this has to remind us of the previous Thunderbolt Sanjian and Celsius, ignoring the market environment, it is indeed an extremely dangerous behavior to give users a super high rate of return (BlockBeats note, for details about Three Arrows and Celsius Thunderstorm, see From Celsius to Three Arrows: Dominoes of Encrypted Ten Billion Giants, Epic Liquidity Exhaustion").

Although there is no exact balance sheet information publicly available about Crypto.com, if we search the company for the past few months Historical news will be found to be related to layoffs. An article published by CoinDesk in October disclosed that the number of layoffs at Crypto.com was far more serious than reported. What's even more frightening is that according to Crypto.com's known wallet address marked by Nansen, SHIB has 500 million The U.S. dollar accounts for 21% of Ethereum assets, and according to more detailed address statistics from 0xScope, Crypto.com’s current total assets are only about 3 billion U.S. dollars. For such a huge crypto institution, most of the liquidity is actually supported by popular Meme coins.

Potential tricky proof of funds, CZ interrupted again, Coupled with the previous layoff news, CRO Token is also facing huge selling pressure. At present, the amount of CRO's open interest has soared wildly, and the price of CRO has been falling all the way. Short traders even need to pay an annualized fee rate of about 2000%. Perhaps in response to selling pressure, the Crypto.com team also made extreme choices. According to BlockBeats, the address marked as Crypto.com transferred 200 million CRO to the burning address today, accounting for 0.8% of the total supply, and the price of CRO also rose for a short time.

This situation is almost exactly the same as Celsius and FTX on the eve of the collapse.

Celsius, Three Arrows, FTX..., the crypto giants have fallen one after another before our eyes. The ripple effect brought by Luna seems to be still expanding. At this time, the world's largest transaction The CEO of the platform is encouraging a run on crypto institutions. We don't know who the next agency will be, but it's important to remember that you should never be the last one out.

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