Days after the FTX debacle, all eyes are now on rival Crypto.com.
Investors worried about the magnitude of the consequences caused by this shock wonder if there are not other corpses in the drawers of the crypto industry. Speculation is therefore rife.
For some Crypto.com could be the next cryptocurrency company to face a severe liquidity crisis as the collapse and bankruptcy of FTX is prompting greater scrutiny in the digital assets industry.
But the Singapore-based exchange’s CEO Kris Marszalek said the company’s exposure to crypto exchange FTX was minimal and had a “tremendously robust balance sheet.”
“We never needed to raise any funds,” he said during an interview hosted on its YouTube channel.
Marszalek claimed Crypto.com has an exposure of under $10 million to FTX when the firm went bankrupt on November 11. Other investors have reported larger losses: venture capitalist Sequoia Capital said it lost $210 million to FTX, while the Japanese firm Softbank has quantified its losses at $100 million.
The Chief Executive Officer said that Crypto.com had in the past sent $1 billion to FTX for the purchase of stablecoins, which are digital currencies whose prices move very little. But that the company had recovered almost all this sum before the bankruptcy of FTX.
“We’ve recovered everything,” Marszalek claimed. “Our exposure is less than $10 million. Those are the facts.”
He did not say when Crypto.com got the money back.
‘We’ve Never Used It’
The insolvency of FTX, which filed for Chapter 11 bankruptcy on Nov. 11, appears to have occurred when its founder Sam Bankman-Fried reportedly transferred $10 billion of customer funds from FTX to his cryptocurrency trading platform Alameda Research, according to Reuters, which cites two sources that “held senior FTX positions until this week.”
FTX faces a shortfall of $1.7 billion, one source told Reuters, while the other source said between $1 billion and $2 billion was missing. Bankman-Fried, who resigned as CEO, was once hailed as the savior of the sector during the liquidity crisis of last summer. His company was…