While the ecosystem’s trust in centralized platforms is at an all-time low, we learn that last October Crypto.com mistakenly sent 320,000 ETH to Gate.io. It was about $410 million at the time.
Crypto.com mistakenly transfers 320,000 ETH to Gate.io
It is to believe that 2022 is placed under the sign of the lack of seriousness on the part of certain platforms. After the questionable actions of FTX and Celsius that led to their bankruptcy, we learn that almost a month ago, Crypto.com made the mistake of sending 320,000 ETH from its reserves to the Gate.io exchange.
In fact, although this case comes out today, the operation dates from last October 21 and the full funds have since been recovered according to Crypto.com CEO Kris Marszalek:
The ETH transfers that generated so much FUD & speculation on Twitter today were made over three weeks ago, on October 21st to https://t.co/pFc4Pz9nFR’s whitelisted corporate account at https://t.co/Mr9GCkL2gV.
— Chris | Crypto.com (@kris) November 13, 2022
Crypto.com executive explained it was due to an error when moving to a new storage address, because the company has a corporate account at Gate.io. This address would effectively 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 instead of our cold wallet. We have since strengthened our process and systems to better manage these internal transfers. »
For his part, Changpeng Zhao, the CEO of Binance, did not fail to react considering that there was a problem if an exchange moved large amounts of cryptocurrency before or after disclosing its address:
If an exchange have to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems. Stay away. Stay #SAFU. 🙏
— CZ 🔶 Binance (@cz_binance) November 13, 2022
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Not only does this mishandling have the merit of being underlined by the amount in question, approximately $410 million at the time of the 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”, note however that we are talking about an international level platform with several billion dollars under managementnot a beginner with a wallet of a few hundred dollars.
Regarding this case, it has not been officially specified whether it was customer funds or corporate cashalthough the address in question suggests that these ETH did indeed belong to the users.
To a lesser extent, we can also wonder about the fact that Crypto.com, which acts as a trusted third party with investors, stores part of its reserves with another trusted third party. Indeed, in the event of bankruptcy, this increases the risk of contagion.
If this event has fortunately caused no serious consequencesit resurfaces in a context which, with the FTX affair, does not help to regain the confidence of the ecosystem in centralized platforms.
👉 Also in the news – FTX files for bankruptcy and Sam Bankman-Fried resigns as CEO
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Source: Gate.io
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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