Crypto.com CEO addresses whereabouts of $1B in stablecoins sent to FTX

CEO Marszalek says the firm has recovered much of the funds and has less than $10M in exposure to FTX.

During a live ask-me-anything (AMA) session with users on Monday, Crypto.com CEO Kris Marszalek explained that the firm sent large-sum stablecoins to troubled cryptocurrency exchange FTX to fulfill liquidity within customers’ orders at the time when FTX was still functional. As told by Marszalek: 

“Over a year, $1B was moved to FTX and we recovered all of this. We only had exposure of under $10 million when FTX shut down. And FTX was a trading venue where this is one of the few trading venues with decent liquidity for some of the coins like the ones I mentioned earlier.”

During the session, Marszalek reassured users that the exchange was not halting withdrawals. Although, a higher volume of requests has led to a backlog of customer service tickets. The Crypto.com chief then stated that only three coins, two of which are FTX tokens and the other being a securitized token, currently have their withdrawal functions suspended on the exchange.

Marszalek also denied allegations that the exchange was using its native token, CRO, as collateral for loans: “We’ve never used it, and we haven’t needed to use it,” he said, pointing out that the exchange has a “very simple business that generates a fairly decent amount of revenue,” opting to focus on that direction instead.

Finally, in response to users questioning why approximately 20% of the exchange’s reserves are in memecoin Shiba Inu (SHIB), Marszalek explained that they were simply customer deposits:

“And it so happens that last year DOGE, and SHIB were two extremely hot meme coins. And people bought a lot. And they’re holding it; they didn’t sell it. We have no control over what you guys buy. You buy it; we will start it will keep it safe.”

Like many other exchanges, Crypto.com has seen a flurry of withdrawals in the aftermath of FTX’s collapse. The firm also became the target of wide-ranging conspiracy theories on Twitter after it was uncovered that the exchange accidentally sent 320,000 Ether (ETH) to Gate.io before recovering the funds shortly after.