It is said that to err is human. However, when a mistake costs you $400 million, it’s puzzling. Indeed, the exchange platform Crypto.com recently experienced this the hard way. Thus, 320,000 ETH, the equivalent of $400 million, have been mistakenly sent to its rival platform Gate.io since October 21..
Crypto.com misadventure exposed
Crypto.com might have wished to keep this incident to itself. It was without counting on the intervention of a user who put the Singaporean platform in the embarrassment on Twitter. Through a screenshot, he wondered why a substantial amount of ETH was leaving Crypto.com.
Crypto.com CEO Kris Marszalek immediately stepped up to the plate. He confirmed the information of the transfer made three weeks ago with a tweet. Moreover, he indicated that it was a handling error by his team. Concretely, the ETH that had to be transferred to a new cold wallet were sent to a whitelisted address of a third-party exchange. In other words, Crypto.comm sent the funds to their business account opened at Gate.io.
More fear than harm
Luckily for Crypto.com, this mishap did not turn sour. That’s what Marszalek says his tweet. The CEO confirms that the incident has been resolved and that Gate has returned all funds to them.
However, the said sum still constitutes 80% of the platform’s ETH reserves. Therefore, one understands the cautious approach of some towards Crypto.com. This is even more so when one observes the ease with which the funds ended up with its competitor.
Lack of professionalism or lack of luck?
This is not Crypto.com’s first such mistake. An exchange employee mistakenly transferred more than $7.1 million last year. So history repeats itself for crypto.com. Some might see it as a twist of fate, others a notorious sign of amateurism. In any case, the succession of these two incidents tends to arouse suspicion.
Crypto.com wants to be reassuring, however, by indicating that new provisions have been put in place to avoid this type of incident. Nevertheless, all of this has something to erode the confidence of crypto-enthusiasts in centralized platforms. And even if the Crypto.com misadventure had a happy ending, it raises questions about the reliability of the platform. Thus, mistrust is understandable in a context where the collapse of the FTX exchange is still much talked about.
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