After FTX, fears of Crypto.com's insolvency are becoming increasingly real.
The exchange spent exorbitant sums on marketing campaigns earlier this year, including the infamous "Fortune Favors the Brave" and the rights to the name of the LA Lakers basketball stadium. He also advertised high interest rates for stakers of his CRO token that earned a rebuttal from many youtubers.
Impossible, therefore, not to notice certain similarities with FTX, so confidence in Cronos is taking a sharp downward turn.
What is the risk from holding crypto on crypto.com?
The first problem was highlighted by Nansen who suggests that Crypto.com holds just over 30 percent bitcoin while the rest of the assets appear to be invested in altcoins of uncertain value, including large stocks of Shiba Inu and Chiliz. On Nov. 9, Crypto.com promised to publish verified proof of reserves to dispel rumors of insolvency.
On Nov. 11, Crypto.com published a blog post in which it claimed to hold nearly $3 billion in reserves, including $53,024 BTC and 391,564 ETH.
However, on November 9, Crypto.com suspended deposits and withdrawals of USDC and USDT on Solana's blockchain.
Marszalek, the founder, also revealed that Crypto.com's exposure to FTX was less than $10 million, contrary to the previously mentioned figure of $1 billion. Most of it has been recovered, the chief executive said.
"We don't give loans to third parties, we don't take counterparty risk, we don't even own Tether."
However, Marszalek also confirmed that 20 percent of Crypto.com's reserves are in SHIB "because it reflects what customers have purchased, it's 1:1."
It remains to be seen whether or not Crypto.com will be involved in a lapse like FTX. However, it has taken some steps to dispel criticism, including releasing some information, promising to conduct an audit soon, and taking measures to protect itself from a potential collapse of Solana-based assets such as USDC and USDT.
