$400M Accidentally Sent by Crypto.com to Competitor Gate.io

The sum of 320k ETH has been mistakenly transferred by Crypto.com to a Gate.io address and retrieved days after.

Cryptocurrency trading platform Crypto.com accidentally sent 320,000 ETH – worth of around $400 million representing 82% of Crypto.com’s ETH holding in the cold storage – to its rival Gate.io after mixing up its own corporate account wallets with a new Crypto.com cold storage address.

The mistake came last month on October 21, but Crypto.com CEO Kris Marszalek acknowledged the error just after the shocking collapse of FTX, leaving customers concerned over the exchange’s transparency. As a consequence, Crypto.com’s Cronos (CRO) token fell 30%.

The ETH transfers that generated so much FUD & speculation on Twitter today were made over three weeks ago, on October 21st to https://t.co/pFc4Pz9nFR’s whitelisted corporate account at https://t.co/Mr9GCkL2gV.

— Kris | Crypto.com (@kris) November 13, 2022

On October 29, Gate.io subsequently returned to Crypto.com a slightly diminished sum of 285,000 ETH, around $456 million (as a result of a minor ETH surge).  Further investigation showed that the missing 35,000 ETH was sent to a different address, which is yet to be confirmed by the crypto exchange.

“Crypto.com proceeded to withdraw the funds back to its cold wallets over the following days. The entirety of ETH was successfully withdrawn by Crypto.com and returned to our cold storage,” Marszalek revealed on Twitter. “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”.

Clarifications on @cryptocom's transfer for the sake of transparency & education:

1) Snapshot for PoR audit taken on Oct 19. https://t.co/a4NJTN8Brj's deposit was not included https://t.co/5U5tZWFfBF
2) All 320K ETH were returned https://t.co/7G5l3YLLIhhttps://t.co/IvyiBu9aBY

— Gate.io (@gate_io) November 13, 2022

 “Crypto.com sent 320,000 ETH to the Gate.io account it was using. This large-amount entry triggered the security audit mechanism of the Gate.io platform, which was intercepted by the risk control system. After communicating with Crypto.com and confirming that it was an operation error transfer, we immediately started the asset return process and assisted in returning all the wrongly transferred assets,” confirmed Gate.io on its platform.  

This is not the first time in recent history that Crypto.com send out an erroneous transaction. In August, the trading platform accidentally transferred $10.5 million AUD (about $7.2 million USD) to a Melbourne woman attempting to get a refund of just $100.