Bitcoin price has dropped to lowest levels not seen in two years. He erased his gains in the post-coronavirus period. Now, Changpeng Zhao, CEO of Binance, the world’s largest Bitcoin and crypto exchange, said that the FTX crisis may be about to hit another crypto exchange. He warned of “clear signs of trouble”. Here are the details…
Binance CEO warns the community with his tweet
“If an exchange has to transfer large amounts of crypto before or after revealing wallet addresses, it is a sign of an open problem,” Binance CEO Changpeng Zhao wrote on Twitter. He stated that such exchanges should be avoided. Changpeng Zhao’s statement came when Crypto.com mistakenly transferred more than 300,000 Ethereum from its exchange. This amount transferred to Gate.io, another crypto exchange, corresponds to approximately 360 million dollars.
If an exchange have to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems. Stay away. Stay #SAFU. 🙏
— CZ 🔶 Binance (@cz_binance) November 13, 2022
The unprecedented collapse of FTX, once the third largest cryptocurrency exchange, has caused many in the crypto industry to raise concerns about reliability. To address this skepticism, crypto executives have begun to share “evidence of reserves.” With proof of reserve, exchanges’ wallets and the amount of coins they hold are revealed.
Withdrawals from Crypto.com increased
That’s why Changpeng Zhao’s mention of fund transfers before or after proof of reserve caused the cryptocurrency community to shift its focus to Crypto.com. However, it is worth noting that Crypto.com CEO Kris Marszalek announced the transfer in question. The CEO said that this transfer was made by mistake. “It was supposed to go to a new cold address, but it went to a whitelisted exchange address,” he wrote on Twitter. “We worked with the Gate team and the funds were then returned to our cold wallet,” he added.
Still, the CEO’s statements seem to have not fully reached the community. It is seen that 14 million dollars of Ethereum and 39 million dollars of ERC20 tokens have been withdrawn from the exchange. In the meantime, it is worth noting that Changpeng Zhao does not specifically target Crypto.com. The CEO may only have pointed out items that need to be considered for users to act with caution.
Changpeng Zhao warned of crisis
Finally, cryptocoin.com As we reported, CZ warned that the effects of FTX’s rapid collapse will continue. He stated that the FTX crisis is not the last crisis for the cryptocurrency market. Zhao warned that the $1 trillion cryptocurrency market is facing a crisis similar to the 2008 financial crisis that crashed investment bank giants Lehman Brothers and Bear Stearns. He argued that following the collapse of FTX, more crypto companies could face a similar fate.
