According to the CEO of Crypto.com, Kris Marszalek, his firm had recovered much of the $1 billion that had been sent to FTX when the crypto exchange collapsed. However, he acknowledged that at the time of FTX’s collapse, Crypto.com’s exposure to the crypto platform was below $10 million. Marszalek also claimed that Crypto.com has never used its crypto token as collateral.
Crypto.com’s Business Model
Kris Marszalek, the co-founder and CEO of Crypto.com, recently told his followers that when FTX collapsed, much of the $1 billion that was sent to the now-defunct exchange platform had been recovered. According to the CEO, Crypto.com’s exposure to FTX was under $10 million when the latter was forced to file for bankruptcy.
Responding to speculation that Crypto.com may be the next crypto exchange to face an FTX-style user exodus, Marszalek insisted on Nov. 14 that it has been business as usual at his firm. Speaking during an ask me anything (AMA) session arranged by the crypto exchange, Marszalek also reiterated that his firm’s primary focus is serving its 70 million plus clients who largely buy and hold crypto assets.
The Crypto.com boss also claimed that his firm’s business model is different from the one used by FTX.
Surging Transactions and Withdrawal Pause Rumors
As reported by Bitcoin.com News, FTX’s apparent practice of misappropriating customers’ funds eventually led to its downfall. Following FTX’s demise, rumors emerged suggesting Crypto.com, which recently admitted to sending digital assets worth over $400 million to Gate.io by mistake, might be the next crypto exchange to fall.
In addition, the recent surge in the number of transactions as well as reports alleging that Crypto.com had paused withdrawals seemed to lend credence to the rumors. However, in his response to reports suggesting the exchange had stopped withdrawals, Marszalek said:
This is absolutely not true, we are operating as usual. There is a heightened level of trading activity which means higher trading volumes which mean more revenues for us.
While Marszalek admitted that the exchange is grappling with a backlog of customer service tickets, he nonetheless emphasized that steps to rectify the situation were being taken. Concerning the alleged use of Crypto.com’s token CRO as collateral, the CEO said:
We have never used CRO as collateral for a single loan in our history. Not even once.
Marszalek added that Crypto.com is already running a simple business that generates decent revenues and therefore has no interest in using its token to generate more income.
What are your thoughts on this story? Let us know what you think in the comments section below.
Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.
Image Credits: Shutterstock, Pixabay, Wiki Commons, FellowNeko / Shutterstock.com
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.