Has the dust settled yet? Nope – the FTX fallout has quite a ways to run yet. Meanwhile, Crypto.com has admitted a stupendously large clerical error, involving fellow crypto platform Gate.io.

Crypto exchanges, eh? Got yourself a self-custody, cold-storage hardware wallet yet?


Crypto.com’s US$400 million fat finger

So… Crypto.com. What happened? (And incidentally, that exact phrase might have some weird SBF-related meaning – see further below for that.)

Here’s the lead-in background. In the wake of the FTX’s mind-bogglingly messy implosion, industry figures including Binance exchange CEO Changpeng Zhao and Ethereum co-founder Vitalik Buterin have been calling for a transparent way for crypto exchanges to show the world their solvency and their underlying assets.

Proof-of-Reserves, they’re calling it. It’s actually a cryptographic protocol developed by Buterin.

Yesterday, it came to light that the also-quite-massive crypto exchange Crypto.com had sent a smaller exchange, Gate.io, 320k in ETH, with Gate.io later returning the funds.

There had been some speculation flying around on Twitter that the two exchanges were attempting to bolster the Gate.io reserves with a snapshot using loaned funds for a Proof of Reserves style audit.

Another prominent exchange, Huobi, by the way, has also been under fire amid similar allegations, as Cointelegraph details here.

Attempting to clarify the Crypto.com side of the story, though, CEO Kris Marszalek revealed that the exchange essentially made a clerical error in sending the funds to Gate.io. But that it actually happened about three weeks ago – well before the FTX blow-up and any fresh calls for Proof of Reserves.

At the time, the funds transfer of 320k ETH was worth about US$400 million.

Gate.io has reportedly actually been posting its own proof of reserves-style audit for a few years. The exchange has pointed out that its latest snapshot was taken on Oct 19, two days before Crypto.com’s accidental fund transfer of 320,000 ETH.

Crypto.com’s Kris Marszalek has been attempting to further dispel the quickly spreading fear, uncertainty and doubt (FUD) around this situation.

Here he is, too, addressing concerns about why a whopping 20% of the exchange’s reserves are held in the meme coin Shiba Inu (SHIB). Yes, it’s a top 20 crypto, but that’s a lot of exposure to a meme dog coin.

As Marszalek explains it, though, the 20% SHIB is part of customer funds kept on the exchange in cold wallets. Customers have bought a lot of DOGE and SHIB, he noted, adding: “As long as they’re holding it, we will be holding it. We have no control over what you guys buy.”

In any case, for a crypto market still in complete shock over the FTX brutalisation, FUD around exchange reserves and how they’re handled will be a very, very hard thing to contain for some of these platforms right now.

Like FTX, Crypto.com, which has naming rights on the famous home stadium of the LA Lakers in a 20-year, US$700 million deal, is a major player in the centralised crypto exchange space, also spending a truckload on commercials featuring Matt Damon and LeBron James.


FTX… ‘What’?  

Before we check in on the actual health of the market and the price of Bitcoin and whatnot, what’s the latest on the FTX implosion, then?


Last time we checked in, which was yesterday in this column, former FTX CEO Sam Bankman-Fried and a few other FTX execs were being investigated by the authorities in the Bahamas, where the crumbling crypto exchange is based.

That’s an ongoing situation, but we can at least probably assume that Bankman-Fried and some of his cronies are still holed up there for now, and haven’t fled to Dubai or Argentina or some remote spot in the Bermuda Triangle.

Here’s something disturbing and/or infuriating, though. According to a Decrypt article today, FTX sister company and trading firm Alameda Research used prior knowledge of tokens scheduled to be listed on the FTX exchange to its distinct advantage.

Alameda was allegedly buying the tokens ahead of public FTX announcements, and then selling them for profit, according to analysis from crypto compliance firm Argus.

Er, if that proves to be true… well, not exactly sure how it would play out next, but we all know how it ended up for Bud Fox in Wall Street and that real-life Wall Street wolf, Jordan Belfort.

The article went on to state that between the start of 2021 and March of this year, Alameda held US$60 million worth of 18 different tokens that were eventually listed on FTX.

Meanwhile, what’s up with Bankman-Fried’s Twitter account??

It continues: A. P. P. E. N.

What happened? Jeez mate, you tell us.

The Crypto Twitterati thinks you might be trying to tell us something, though – maybe about Alameda Research’s former co-CEO, Sam Trabucco who stepped down in August but stayed on as an adviser?


Top 10 overview

With the overall crypto market cap at US$872 billion, up 1% since this time yesterday, here’s the current state of play among top 10 tokens – according to CoinGecko.

The total crypto market cap up a whole percentage point? Seems like a win. We’ll take it.

Bitcoin and Ethereum are showing the rest of the crypto majors the ball today, and it looks like XRP has grabbed it and run with it. It’s up more than 11% over the past 24 hours.

Is there any SEC lawsuit case news? Well, yes, there was news of an impending settlement in the case, which spurred a pump. But hold your horses… apparently it may have been falsely reported.

No mention of a settlement was actually mentioned by the host or interviewees in this following Fox Business clip, but a chyron graphic appeared, reading: “SEC VS. RIPPLE SETTLEMENT EXPECTED TOMORROW.”

Things that make you go, hmmm…


Uppers and downers: 11–100

Sweeping a market-cap range of about US$6.86 billion to about US$320 million in the rest of the top 100, let’s find some of the biggest 24-hour gainers and losers at press time. (Stats accurate at time of publishing, based on CoinGecko.com data.)


 Synthetix (SNX), (market cap: US$437 million) +17%

• Cronos (CRO), (mc: US$1.81 billion) +18%

Trust Wallet (TWT), (mc: US$946 million) +15%

• dYdX (DYDX), (mc: US$342 million) +9%

GMX (GMX), (mc: US$348 million) +9%



Tokenize Xchange (TKX), (market cap: US$741 million) -4%

LEO Token (LEO), (mc: US$3.5 billion) -4%

BTSE Token (BTSE), (mc: US$587 million) -2%

Curve DAO (CRV), (mc: US$386 million) -1%


Around the blocks

A selection of rumour, gossip, randomness and pertinence that stuck with us on our morning moves through the Crypto Twitterverse…

TLDR on the following tweet from popular trader Gareth Soloway (who proudly called the top of the crypto market last year)… he’s predicting a bottom of the market about 5-6 months out from here, with a Bitcoin of about US$9-10k.

Predictions, though – grains of salt, and anything can happen.