More Transfered $1B to FTX, Said It Was To “Hedge Customers’ Trades” - Crypto exchange continues to be exposed to suspicious activities, proving it has a close relationship with FTX. transferred $1B to FTX to hedge customers’ trades

    Besides FTX, the crypto exchange that went bankrupt just 5 days after suffering a serious liquidity crisis, another platform continues to attract the attention of the community –

    It was reported on Twitter yesterday that sent up to $400M in ETH to rival exchange at the end of October – just before provided “proof of reserves” to its users as part of a new push for transparency after the FTX  crisis. This has sparked rumors that some crypto exchanges like and appear to be faking their reserves. CEO then confirmed that the funds were being sent to a new cold storage address but were mistakenly sent to a whitelisted address. subsequently returned the slightly diminished sum of 285,000 ETH, around $456 million as a result of a minor ETH surge, on October 29. released its own proof of reserves on November 12 and Marszalek stated that all funds were returned. Despite the assurances by and, many Twitter users allege that the exchanges are borrowing funds from each other to prop up their proof of reserves.

    Today, it was discovered again that had made a series of transactions to transfer stablecoin USDC to FTX in 2022, with a total value of more than 1 billion USD, along with a lot of CRO tokens issued by the exchange. 

    In response to the latest allegation, CEO Kris Marszalek said:

    “This is false. We have minimal exposure to FTX (under US10m) and only used it as a trading venue to hedge customers’ trades. We never deployed capital for yield with FTX or any 3rd party.

    To simplify for people who don’t understand how hedging works in this scenario: we deposit USDC, use it to buy other coins on the exchange and withdraw back to our wallets.”

    Marszalek’s answer really shocked the community because the CEO not only admitted the shady trading activity but also said that his exchange converted USDC to other cryptocurrencies to hedge customers’ traders – which is not a safe way to hedge assets. In fact, this may be a trick of in which they exchanged users’ stablecoins for tokens and then go long/short on FTX to earn money.

    CEO even accused the largest US exchange, Coinbase, of having a similar move.

    “Probably also worth adding that Coinbase has US$15m stuck at FTX for exactly the same reason. Some of the tokens related to FTX (SRM, RAY, or as Crypto Twitter called them Sam’s coins) only had decent orderbook liquidity on FTX.”

    Coinbase CEO Brian Armstrong on November 9 confirmed Coinbase didn’t have any material expose to FTX or Alameda Research. Meanwhile, many crypto users continue to poke fun at with posts showing that one of the exchange’s wallets has stopped supporting withdrawals because there is not enough ETH left to pay gas fees.

    Binance CEO Changpeng Zhao, who recently announced that he no longer keeps secrets about dubious crypto companies, constantly posting Twitter posts that contain deep implications about competitors:

    “If an exchange has to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems. Stay away.”

    The price of DeFi tokens on Nov 13 increased sharply as investors were concerned the collapse of FTX could adversely affect other CEX exchanges, causing many people to rush to withdraw their money and find their way to decentralized solutions.

    Difficulties surround

    Emerging in the period 2019-2022, was once known for sponsorship deals worth hundreds of millions of dollars. used to pay $700 million for naming rights to Lakers, Clippers Arena. The crypto exchange also poured millions into a global advertising campaign with Matt Damon or spent $215 million to buy other crypto companies. recently announced that it will build a new headquarter in France with an investment of $ 145 million, despite having to cut 260 employees in the middle of the year.

    In addition, among $2.8 billion in user reserves announced by, 19.68% is Shiba Inu (SHIB) tokens. The value of SHIB that the exchange holds is even more than ETH. 

    Source: CoinDesk

    “These are customer deposits – we securely store 1:1 everything our users buy & hold on the platform. And indeed, users bought a lot of Shiba & Doge in 2021. You could figure it out by looking at their global market cap rankings (Doge #9, Shiba #14)”, wrote CEO Kris Marszalek.

    The coin CRO has dropped by more than 60% over the last 7 days because of bad news and the collapse of FTX.

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