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Crypto.com’s Native Token, with Bitcoin and Ethereum, Drops as the FTX Crash

Crypto.com's Native Token, with Bitcoin and Ethereum, Drops as the FTX Crash

Cronos, Crypto.com’s native token, fell to a 22-month low on Monday amid increased scrutiny of centralised exchanges after the bankruptcy of big player FTX earlier this month.

CRO/USD fell 28% to $0.0557, half in value over the last week, as investors anticipated a liquidity crisis similar to that seen in FTX.

Concerns over the exchange’s financial condition grew over the weekend when on-chain data revealed that it had unintentionally transmitted around 82% of its Ethereum reserves—roughly $400 million—to a Gate.io-linked wallet in October.

While the funds were recovered, traders pointed out that the transfer violated Crypto.com’s assertions that all customer assets are stored offline in cold wallets. The exchange recently revealed its crypto holdings and garnered criticism for holding more than 20% of its assets in the memecoin Shiba Inu.

The disclosures came only days after the bankruptcy of FTX. The crash badly harmed sentiment against centralised operators like Crypto.com, with numerous industry players urging traders to shift their cash away from controlled exchanges.

Binance CEO Changpeng Zhao also slammed Crypto.com, advising customers to “stay away.” While Crypto.com CEO Kris Marszalek ensured traders that their funds were safe, many social media influencers recommended that customers remove money from the platform.

Effect of FTX Demise on Crypto Market

In the last 24 hours, CRO losses considerably exceeded decreases in the larger crypto market. Bitcoin, the world’s biggest cryptocurrency, fell 4% and is now trading at two-year lows, while Ethereum fell 6%. Other centralised exchange tokens also declined.

Binance’s token was down roughly 5%, while OKEx’s native coin was down 6%. Crypto markets have declined rapidly over the last week after the collapse of FTX, the third-largest exchange in the field, and the suspension of user withdrawals.

The focus now shifts to other organisations linked to the exchange, with lender BlockFi recently banning withdrawals owing to its exposure to the troubled exchange.

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