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Cryptocurrency exchange Crypto.com mistakenly sent 320,000 ETH to a wallet address linked to Gate.io in late October. Binance CEO Changpeng Zhao has advised users that it is best to stay away from the platform ever since the platform recovered the assets.
The unprecedented collapse of FTX, once the third largest cryptocurrency exchange that earned a reputation as the bail-out king of crypto during the recent crypto meltdown, has many in the cryptocurrency industry expressing concerns over the credibility of centralized players.
To dispel this doubt, crypto authorities started sharing proof of reserves. For one, Crypto.com published its crypto addresses, detailing how much and what cryptocurrencies it stores on behalf of its customers.
However, users were quick to determine a suspicious transfer of 320,000 ETH to a wallet address linked to Gate.io on October 21, 2022, as the exchange claims that all user-owned cryptocurrencies are cold-pressed in partnership with Hardware. Storage is kept offline. Wallet provider Ledger.
Crypto.com CEO Chris Marszelek revealed that the transaction was a mistake. “It was supposed to move to a new cold storage address, but was sent to a whitelisted external exchange address,” he said:
“We worked with the Gate team and the funds were later returned to our cold storage. New processes and features were implemented to prevent this from happening again.”
Despite the explanation, the crypto community has been left with a sour taste for the platform. Many crypto users have questioned how it is possible to accidentally send $400 million worth of ETH to an address that was not the designated receiver.
Notably, this is not the first time that Crypto.com has made such a mistake. In August, the exchange made headlines after revealing that it was a mistake. was sent AUD$10.5 million (over $7 million) to Melbourne-based investors instead of an AUD $100 ($67) refund. What is worse is that the incident happened in May 2021 and went unnoticed till December 2021.
Meanwhile, Binance CEO CZ, who has been in the news recently because of his Participation in the FTX Sagaadvised users to stay away from Crypto.com, claiming that this is a clear sign that they are not capable enough.
“If an exchange has to transfer large amounts of crypto before or after displaying their wallet addresses, that is a clear sign of problems. Stay away. Stay safe,” he said.