{"id":1739173,"date":"2022-11-15T06:03:03","date_gmt":"2022-11-15T11:03:03","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1739173"},"modified":"2022-11-15T09:34:00","modified_gmt":"2022-11-15T14:34:00","slug":"ftx-collapse-sparks-contagion-fears-as-crypto-com-withdrawals-jump","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/ftx-collapse-sparks-contagion-fears-as-crypto-com-withdrawals-jump\/","title":{"rendered":"FTX Collapse Sparks Contagion Fears as Crypto.com Withdrawals Jump"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fftx-collapse-sparks-contagion-fears-as-crypto-com-withdrawals-jump%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1739173&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The collapse of the <a href=\"https:\/\/www.theepochtimes.com\/t-crypto-exchange\">crypto exchange<\/a> FTX has triggered fears of a potential contagion spreading in the market, with withdrawals at another exchange, Crypto.com, jumping after it admitted to making a transaction mistake.<\/p>\n<p>FTX, one of the largest crypto exchanges, filed for bankruptcy last week following a report by CoinDesk which revealed that the balance sheet of FTX\u2019s affiliate trading company, Alameda Research, was largely composed of the exchange-issued FTT token.<\/p>\n<p>\u201cThere was a balance sheet issue, and it became known to many depositors all at once \u2026 And because it was a surprise, there was a bank run that led to insolvency,\u201d Sergey Nazarov, co-founder of Chainlink, <a href=\"https:\/\/techcrunch.com\/2022\/11\/11\/can-proof-of-reserves-prevent-future-crypto-exchange-collapses\/\">said<\/a> to TechCrunch.<\/p>\n<p>The fear in the markets led to crypto exchanges publishing their \u201cproof of reserves\u201d (PoR) in a bid to calm down investor panic. PoR refers to independent audits which seek to affirm that a custodian possesses the assets it claims to own on behalf of its clients. Singapore-based Crypto.com was among the exchanges that published their PoR.<\/p>\n<p>People quickly raised skepticism over a transaction done in October which saw 320,000 ETH ($400 million) being transferred from Crypto.com to a wallet address linked to another exchange, Gate.io. The amount represented around 82 percent of Crypto.com\u2019s Ethereum (ETH) reserves.<\/p>\n<p>Crypto.com CEO Kris Marszalek later clarified that the transaction was a mistake. It was originally intended to be moved to a \u201ccold storage address,\u201d but got accidentally sent to the Gate.io wallet. The ETH funds have been repatriated and sent into cold storage, he <a href=\"https:\/\/twitter.com\/kris\/status\/1591605600638881792\">stated<\/a>. (Cold storage refers to the practice of keeping a cryptocurrency offline in order to prevent unauthorized access.)<\/p>\n<p>However, Marszalek\u2019s explanation did little to calm fears. Between 7:00 p.m. EST, Saturday, and 5:30 a.m. EST, Sunday, users withdrew a net $14 million worth of ETH and $39 million worth of other tokens tied to the Ethereum network, according to a <a href=\"https:\/\/www.wsj.com\/amp\/articles\/crypto-com-withdrawals-rise-after-ceo-admits-transaction-problem-11668350510\">report<\/a> by The Wall Street Journal, citing an investigation by blockchain analysis firm Argus.<\/p>\n<h2>Transaction Error<\/h2>\n<p>In a series of <a href=\"https:\/\/twitter.com\/kris\/status\/1591741801245052928\">tweets<\/a> on Nov. 13, Marszalek explained that fund movements from Crypto.com custody systems are only possible between approved and whitelisted addresses (i.e, an approved senders list) attached to the company\u2019s cold wallets, hot wallets, and corporate accounts held at other exchanges.<\/p>\n<p>The transfer of 320,000 ETH was done to a whitelisted address belonging to one of Crypto.com\u2019s corporate accounts at Gate.io. \u201cThat\u2019s all there is to it. All our systems are operating normally,\u201d he said.<\/p>\n<p>The value of Cronos, the digital token issued by Crypto.com, sank 20 percent on Sunday compared to the previous 24 hours. On Monday, roughly 98 percent of all transactions conducted on the Cronos blockchain were withdrawals, according to The Australian Financial Review.<\/p>\n<p>Adam Cochran, founder of venture capital company Cinneamhain Ventures, raised concerns about Crypto.com in a\u00a0<a href=\"https:\/\/twitter.com\/adamscochran\/status\/1591616372194541568\">tweet<\/a>\u00a0on Nov. 13.<\/p>\n<p>\u201cFor what it\u2019s worth, given the move of accidentally sending cold wallet funds to the wrong address, the weird balances on their CRO chain, the \u2018partial\u2019 cold wallet release, it\u2019s not looking good for these guys in general,\u201d he said.<\/p>\n<div class=\"author_wrapper\">\n<div class=\"one_author_block round\">\n<div class=\"top_row\">\n\t\t\t\t\t<a href=\"https:\/\/www.theepochtimes.com\/author-naveen-athrappully\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/10\/NaveenAthrappully.jpg\" alt=\"Naveen Athrappully\" \/><\/a><\/p>\n<p>Follow<\/p>\n<\/div>\n<p>Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.\n<\/p>\n<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The collapse of the crypto exchange FTX has triggered fears of a potential contagion spreading in the market, with withdrawals at another exchange, Crypto.com, jumping after it admitted to making<\/p>\n","protected":false},"author":1,"featured_media":1695609,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[547],"tags":[],"class_list":["post-1739173","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1739173","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1739173"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1739173\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1695609"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1739173"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1739173"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1739173"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}