On Monday, Cronos, Crypto.com’s native cryptocurrency, fell to a 22-month low. The drop comes at a time when centralized exchanges were on the radar after the collapse of the world’s largest cryptocurrency exchange, FTX.
Cronos (CRO) fell 28% to $0.0557 and is now down over 50% in the last week. The dip resulted from investors’ concern about a similar liquidity destiny to that of FTX. CRO is now trading at $0.0742.
Investors began withdrawing their money over the weekend after the firm’s CEO, Kris Marszalek, confessed to mishandling a $400 million deal. According to on-chain statistics, the company transferred over 82% of its Ethereum assets to a wallet connected to Gate.io in October.
Marszalek subsequently assured users that their cash was secure. Investors are accusing the company of making fraudulent statements.
It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address. We worked with Gate team and the funds were subsequently returned to our cold storage. New process and features were implemented to prevent this from reoccurring.
— Kris | Crypto.com (@kris) November 13, 2022
Furthermore, the exchange recently reported that 20% of its holdings were in the meme-coin Shiba Inu, which irritated investors even more.
The announcement came soon after FTX was discovered mismanaging customers’ cash and failing to satisfy withdrawal requests.
Binance CEO Changpeng Zhao also weighed in on the shocking news, advising consumers to “stay away.”
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
Crypto.com said their CEO would appear live on YouTube to answer any questions or concerns about the ‘transactions’ claimed by the company. Even if the market was battling negative tendencies, FTX’s bankruptcy inflicted significant harm. BlockFi, a cryptocurrency lender, has also blocked withdrawals owing to its stake in FTX.