The FTX crash has investors on high alert, with many wondering which exchanges are insolvent and which will be the next to fail. Recent events have put three companies in the crosshairs, with users withdrawing funds from the platforms in fear of losing their cryptocurrencies.
When FTX proved to be an insolvent company, several experts started charging other platforms to prove their reserves. Thus, various exchanges began to publish their cryptocurrency addresses.
In the middle of the process, Huobi exchanges, gate.io Y Crypto.com they were accused of faking their reservations to mislead their users.
The rumors began when a Twitter user discovered that Crypto.com had sent 320,000 units of Ethereum (ETH) to a Gate.io wallet.
Under pressure from users, the CEO of the company took to Twitter to try to clarify the situation, saying that he had sent the assets to the wrong wallet.
Crypto.com and Gate.io
As reported by cryptoreportcrypto.com customers were frustrated with the situation, demanding transparency from the company and warning that they were withdrawing funds from the platform.
“It was supposed to be a change to a new (offline) cold storage address, but it was sent to an exchange address on our whitelist. We worked with the Gate.io team and the funds were returned to our wallet,” said the CEO.
With the situation, several experts announced that they would stop using Crypto.com, and the popular influencer Ben Armstrong (BitBoy) warned that he would withdraw all his assets from the platform and advised his followers to do the same.
According to him, the recent collapse of FTX taught him the importance of self-custody.
“I just withdrew all my funds from crypto.com. I don’t necessarily think there’s anything wrong with @cryptocom… but if you haven’t learned the importance of self-custody, there may be no hope for you. They are not your keys, they are not your cryptocurrencies”.
I just withdrew all my funds off https://t.co/hKkLMzo7Sl. I don’t necessarily think anything is wrong with @cryptocom… but if you haven’t learned the importance of self-custody by now then there may be no hope for you.
Not your keys, not your crypto
— Ben Armstrong (@Bitboy_Crypto) November 13, 2022
The CEO of Binance, Changpeng Zhao (CZ)also spoke on the matter, saying that an exchange moving large amounts of cryptocurrency before or after testing its reserves is a “clear sign of trouble.”
If an exchange have to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems. Stay away. Stay #SAFU. 🙏
— CZ 🔶 Binance (@cz_binance) November 13, 2022
The CEO of Crypto.com criticized the rumors of insolvency and said that people should focus on companies that had ties to FTX.
“It is getting tiresome to respond to nonsensical rumors from anonymous accounts citing anonymous sources. People should use some basic logic: which companies had ties to FTX? These may be affected by this event,” said Crypto.com CEO
It’s getting tiresome responding to nonsense rumors from anonymous accounts citing anonymous sources.
People should use some basic logic: which businesses had ties to FTX? These may be affected by this event. https://t.co/pFc4Pz9nFR had nothing to do with FTX.
— Kris | Crypto.com (@kris) November 11, 2022
Meanwhile, a user posted on Twitter that he can no longer withdraw USDT funds from gate.io, advising his followers to immediately withdraw funds from the platform.
😰 แช ป
น่า จะ ข่าว กับ มา ทั้ง วัน แล้ว แต่ ผม เพิ่ง ไป งาน สัมมนามา ได้ ตาม อ่าน วัน นี้ เลย มา ดู จ จ จัง ป ช่วง ช่วง เย็น ๆ ๆ กลาง คืน ๆ ๆ ๆ ๆ ๆ ๆ ๆ ๆ ๆ ๆ ๆ คืน คืน
— EarthDeFIRE (@EarthDeFIRE) November 13, 2022
Although the information was not reported by more users, others are preferring to be safe, withdrawing funds from the exchange before it is too late, after all, FTX gave its word that it was solvent 2 days before it went bankrupt and several users believed it.
“Take your funds from Gate.io and Crypto.com, not FUD, but you better be safe”.
Get your funds out of Gate. io and Crypto. com ASAP.
No FUD but better be safe.
PLEASE RT and help your friends.
— Emperor👑 (@EmperorBTC) November 13, 2022
Another user later said that Crypto.com is likely one of FTX’s victims, having sent $1 billion to the company before the insolvency crisis.
The CEO of the company responded that the information is false, but said that he had at least $10 million trapped in FTX.
“We have minimal exposure to FTX (less than $10 million) and only use it as a trading platform to protect client trades. We never deploy capital for revenue with FTX or third parties,” the company’s CEO said in a tweet.
He went on to say that Coinbase, the largest cryptocurrency exchange in the United States, also has money stuck in FTX.
“It’s worth adding that Coinbase has $15 million stuck in FTX for exactly the same reason. Some of the FTX related tokens (SRM, RAY or as Crypto Twitter called them Sam’s Coins) only had decent liquidity on FTX”.
According to Chinese journalist Wu Blockchainafter Huobi launched its reserve wallets, 10,000 units of Ethereum (ETH) were transferred from the wallet cited by the company to Binance and OKX wallets.
Thus, the Huobi wallet that had more than 14,000 Ethereum at the time of the publication of the reserve report, now has only 4,004 ETH.
After being questioned by users, the company said that part of the disclosed funds were in hot wallets and guaranteed to hold reserves.
“Huobi guarantees the safety of users’ assets and 100% redemption and will not impose any restrictions on users’ deposits and withdrawals,” the company said.
Part of the publicized address is the hot wallet address. During the operation of the exchange, the transactions on the chain are daily routines. Huobi guarantees the security of users’ assets & 100% redemption & will not impose any restrictions on users’ deposits and withdrawals. https://t.co/mQuOg5TAUF
— Huobi (@HuobiGlobal) November 13, 2022
Although there is no concrete evidence that the three exchanges are insolvent, users do not want to wait and see. Withdraw funds while they can until the situation is fully cleared up.
The ripple effect of FTX has shaken user confidence in the companies, which now need to prove they are serious and won’t go away with customer funds.
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