Crypto.com is facing fears of a market contagion after rival exchange FTX collapsed last week.
Crypto.com—the cryptocurrency exchange that sponsors the UFC, Formula One, and the 2022 Qatar World Cup, among others—is facing fresh scrutiny and anxiety in the wake of rival exchange FTX’s stunning collapse last week.
In an AMA (ask me anything) on YouTube Monday, Crypto.com CEO Kris Marszalek attempted to reassure clients, noting that the platform is “platform is performing business as usual.”
“People are depositing, people are withdrawing, people are trading, there’s pretty much normal activity just at a heightened level,” Marszalek said in the AMA.
Marszalek’s AMA came in the wake of FTX—a cryptocurrency exchange owned by American entrepreneur Sam Bankman-Fried— filing for Chapter 11 bankruptcy protection after failing to reach a deal to be acquired by Binance, the world’s largest digital assets trading platform. FTX had been accused of misappropriating customer funds, allegedly borrowing billions in user funds to process withdrawals.
The spectacular collapse of the Bahamas-based FTX sparked a increase in outflows across global crypto exchanges, with users removing a net $3.7 billion worth of Bitcoin and $2.5 billion of Ether between Nov. 6-13.
While Marszalek reassured Crypto.com users that his company does not have “any irresponsible lending practices,” his AMA took place a day after the exchange accidentally sent $400 million worth of the ether cryptocurrency to another crypto exchange. The funds were returned to Crypto.com after the error was identified. However, the mistake sparked fears that Crypto.com user funds were in jeopardy.
To further assuage concerns, Marszalek added that Crypto.com will publish an audited “proof of reserves” in an attempt to increase transparency.
Crypto.com made headlines last year after signing various high-level sponsorship agreements, including the rebranding of the Staples Center sports stadium to Crypto.com Arena. The company also hired actor Matt Damon for a commercial and is currently sponsoring several sports entities, including the UFC.
It is worth noting that the cryptocurrency exchange spent $175 million to emblazon its brand logo on UFC fight kits for the next 10 years.
“This is a partnership between two companies that are the best at what they do,” said UFC President Dana White said in the official press release announcing the deal.