Crypto.com CEO Dismisses Speculation of Financial Trouble, Says FTX Exposure Is Minimal
Crypto.com CEO Dismisses Speculation of Financial Trouble, Says FTX Exposure Is Minimal
In a live question session, Kris Marszalek said the company’s balance sheet is strong.
Over the past week, Crypto.com’s CRO token has dropped almost 45% on concerns the Singapore-based exchange will be the next to face a liquidity crisis. The exchange’s daily volume has collapsed from last year's highs of around $4 billion to about $284 million this past October, according to data from Nomics, and withdrawals are on their way back up as users and investors remove their funds from the platform.
Expect a tough crypto winter, but Crypto.com isn’t going anywhere, CEO Kris Marszalek said during a live interview hosted on its YouTube channel.
In the interview, Marszalek reiterated that the exchange has a strong balance sheet and said its exposure to FTX was limited to $10 million, down from a possible $1 billion in business the two exchanges had together earlier.
“We recovered $990 million from FTX,” Marszalek said, pointing out that fund flows between exchanges are a necessary part of the business.
He also said that 20% of Crypto.com's reserves are in Shibu Inu coin because that's what the customers trade, and everything in its reserves is backed 1-to-1 versus customer crypto deposits.
An audit of Crypto.com is underway, but it will take some time. Audit firms “don’t work at crypto speed,” he said, emphasizing that Crypto.com and the industry both need full transparency to move forward.
Withdrawals are working as expected, he reiterated. The only stoppage has been related to GALA, SRM, and Ray.
“SRM is closely tied to FTX,” he said.
Marszalek said that CRO, Crypto.com’s token, has never been used as loan collateral, unlike the relationship between FTX and Alameda and FTX's token, FTT.
“We’re never going to raise funds,” he added, stating that the business is cash flow positive.