Twice in 18 Months, Crypto.com Sent Million Dollars to Wrong Users

• Crypto.com has repeatedly transferred millions of dollars to the incorrect users.
• It sent 320k units of Ethereum token to the Gate.io crypto exchange.
• The crypto community speculates that probably the exchanges were assisting each other in forging asset certificates.

For the second time, Crypto.com, one of the prominent crypto exchanges, has ‘mistakenly’ transferred millions of dollars to the wrong address. 

Due to the current trend of proof-of-reserve by exchanges, the CEO of Crypto.com, Kris Marszalek, publicly shared the list of addresses of the company’s cold storage. Crypto enthusiasts, upon checking, found that the company had sent 320k units of Ethereum token to another exchange, Gate.io. 

In response to the allegation, CEO Marszalek said they intended to move the funds to another cold storage, but it was erroneously “sent to a whitelisted external exchange address.” Notably, the wrongly transferred fund represented a significant percentage of Crypro.com’s entire asset in its cold storage. The recipient of the wrong transfer returned the funds days after. 

However, the crypto community started speculating that the transfer of over $400 million could not have been a mistake. The Chinese cofounder of F2Pool questioned whether Gate and Crypto.com were assisting each other in forging asset certificates. Nonetheless, there are views that Gate.io already did its proof-of-reserve before the erroneous transfer. 

Additionally, Crypto.com CEO noted that they had taken further steps to forestall a future recurrence of erroneous transfers. In September 2022, news broke that Crypto.com mistakenly sent over $7 million to an Australian woman instead of sixty-eight US dollars. Interestingly, the crypto firm only realized the error seven months after a financial audit. 

However, the woman had already transferred most of the money to another account. The firm took the matter to court.