He who hath named a stadium, shall be the first to go and crypto.com is right behind FTX it seems. As if there’s not enough bad news around, Crypto.com FUD is swirling around social media. Similar to FTX, crypto.com is all about super-aggressive marketing and of course sketchy attitude. As Kris Marszalek, the CEO assured everyone on CNBC (oh boy) that the company is doing fine, the signs are telling otherwise. Oh and for the last nail in the coffin, Changpeng Zhao has warned everyone against a possible FTX-like collapse. With that, if you lose the ability to withdraw assets from crypto.com, maybe Larry David can make a funny episode on Curb Your Enthusiasm. Remember when Matt Damon said “Fortune Favors the Brave” promoting the CRO token on the super bowl ad? Well, CRO is down 40% in one month!
Ode to Crypto.com
Basically, to say that the FTX collapse was a quick disaster, is an understatement. However, the terrifying part is all the information revealed in the aftermath. Once a $40 billion empire, we can now clearly see how all of it was a big fat lie. Yet, it is beyond disturbing how a group of polyamorous kids were relentlessly lobbying for their terrible agenda. And indeed, they kept on lying until last minute just like Do Kwon and his cursed Terra (LUNA). With all that in mind, how can anyone trust a giant exchange platform?
In terms of scale, crypto.com is amongst the top 15 exchange platforms according to CoinGecko. Over the weekend, speculations went wild over the liquidity state of crypto.com. For the most part, a $400 million mishap started the whole thing. On Apparently, crypto.com sent $400 million in Ethereum to gate.io which was the wrong address. They did manage to get the money back but investors are now starting to question why would they send such huge amount of money. Worse yet, Marszalek had not noticed the mistake until data from public blockchain came out to the public.
On Sunday, Changpeng Zhao the CEO of Binance fueled the FUD by pointing out that a sudden move in assets “is a clear sign of problems.” He then added, “Stay away.”
On the other hand, the company has also laid off about a quartet of staff only in the past few months.
On Tuesday morning, Marszalek spoke to CNBC’s Squawk Box addressing some of the concerns. He stated that they have been in contact with more than 10 regulators to prevent a collapse similar to FTX.
“I understand that right now in the market, you’ve got a situation where everyone is done taking people’s word for anything,” Said Marszalek. “We focused on demonstrating our strength and stability through our actions.” He also admitted to a sudden increase in withdrawals but said that they are back to normal.
So basically, all is well right?
We certainly do not have sufficient data to assess the situation independently. However, there is one incident from Marszalek’s past that the investors should acknowledge.
Marszalek’s last job was the CEO of an Australian company named Ensogo. Primarily, Ensogo offered online coupons. The company abruptly went of business back in 2016 as Marszalek departed the company. This was “amid accusations from customers and business partners that they had been ripped off.” The Ensogo customers were unable to access their funds and lost almost all assets. Naturally, this embarrassment meant that Marszalek was ready for a big promotion taking the helm at crypto.com.
And here we are, with a company that owns 20% of its assets in Shiba Inu. And the CEO keeps on insisting that they are a private company so that they don’t need to share their balance sheet. Is crypto.com fine? To answer that question, one must move beyond trust and acquire “faith”.