The Twitter community is on fire, discussing hidden motives behind asset transfers between Crypto.com and Gate.io that took place in October.
The exchange’s CEO Kris Marszalek responded to speculation and said the transfer was done accidentally and had since been reverted.
It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address. We worked with Gate team and the funds were subsequently returned to our cold storage. New process and features were implemented to prevent this from reoccurring.
— Kris | Crypto.com (@kris) November 13, 2022
According to Marszalek, the funds were being sent to a new cold storage address but were mistakenly sent to a whitelisted Gate.io address.
Gate.io supported the narrative and reiterated in a Twitter post that the proof of reserves audit did not include the ETH transferred from Crypto.com. The firm also shared the transaction ID that confirmed all funds were returned to Crypto.com.
Clarifications on @cryptocom‘s transfer for the sake of transparency & education:
— Gate.io (@gate_io) November 13, 2022
Blockchain transaction data from Etherscan indicates that Crypto.com transferred 320,000 Ethereum (ETH) to a wallet that subsequently transferred the assets to a Gate.io wallet on Oct. 21. At the time, the assets were valued at $415.9 million.
Exchanges often move funds around for liquidity purposes. However, the timing of the transaction caused speculation among the community.
On Oct. 28, Gate.io provided its proof of reserves and made it open source. The report indicated that Gate.io has enough ETH reserves to overcollateralize user funds by 104%. However, the report also states that the data for the proof of reserves audit was obtained on Oct. 19, i.e. prior to the Crypto.com…