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Crypto.com accidentally sent $500m to the wrong address 😵‍💫

Crypto.com rumors, the FTX hack, and failed FTX partnerships

November 14, 2022

"We are fine."

GM Baos,

Happy Monday! ❤️ Everything is fine, right? I hope this is the last set of FTX updates...

We cover:

  • Crypto.com transparency

  • The FTX wallet "hack"

  • FTX partners back out

Crypto.com cold wallet addresses

The alarms went off when it was revealed Crypto.com holds 20% SHIB in their reserves — a higher % allocation than the ETH holdings 🥹

How did crypto twitter discover this? In response to the FTX situation, Crypto.com shared all their cold wallet storage addresses and worked with Nansen to create a dashboard tracking those addresses. While this was supposed to be in the spirit of full transparency, it might have backfired... just a little.

Rumors of Crypto.com insolvency started flying when Twitter users saw 320k ETH (80% of their ETH) was sent to Gate.io October 21 and only 285k ETH was returned days later. Leaving 35k ETH unaccounted for.

The FUD was centered around the timing being super suspicious. Because around the same time (October 28), Gate.io showed proof of reserves. So everyone was left panicking and questioning if the Crypto.com deposit was to make their numbers look better and pass audits. Which if true, would make their proof of reserve inaccurate and they'd actually be insolvent 🥲

Then it was confirmed by a few users the audit was calculated at block 15778435 (October 18) and Crypto.com had not sent the 320k ETH until three days after that. Knowing that was huge relief, but nobody really cared. Everyone was still in disbelief. How could Crypto.com be so irresponsible?

Kris Marszalek (Crypto.com CEO) and Gate.io both put out statements clarifying the situation. Crypto.com accidentally sent the funds to their whitelisted corporate account on Gate.io, instead of their new cold wallet. And 100% of the funds were returned, not the rumored 285k ETH.

The FTX collapse played out within a week but the effects will last for a very long time. I don't know anyone who trusts a single CEX right now. It's better to be safe and move your coins to self custody. Like they always say, "not your keys not, not your coins".

The FTX "hack"

The UpOnly podcast is cursed.

While live with an FTX employee, both FTX and FTX US appeared to be hacked for $600m. Why does something bad always happen when they're recording? 😭

FTX confirmed in its official Telegram they've been hacked late on Friday night. "FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Don't go on FTX site as it might download Trojans".

There's a lot of speculation it was an inside job. I mean, there's no way it isn't — right?

FTX partnerships crumble

NBA's Miami HEAT have terminated their partnership with the now bankrupt FTX. Naturally, the 19-year $135m naming rights deal with FTX is off 🙃

"The reports about FTX and it's affiliates are extremely disappointing. Miami-Dade County and the Miami HEAT are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the arena." — Miami-Dade County & the Miami HEAT.

What would you like to see the new name be?

The Formula One team Mercedes- AMG Petronas has also put a pause on their partnership with FTX. FTX had been sponsoring them since September 2021. They even released NFTs together centered around the Miami Grand Prix in May.

Because of FTX's bankruptcy, they removed all FTX branding on their website and the cars driven at the São Paulo Grand Prix in Brazil on Sunday.

"As a first step, we have suspended our partnership agreement with FTX," a team spokesman said. "This means the company will no longer appear on our race car and other branded assets from this weekend. We will continue to monitor closely the situation as it evolves".

Bao-Sized News

Made us Kek

Stay safe, Baos 🥺

–Cassidy