Crypto.com’s errant $405M transaction triggers investors after FTX fiasco

Crypto exchange Crypto.com is under the microscope after sending $405 million to the wrong recipient, raising alarm bells among crypto watchers after the whirlwind unraveling this week of competitor exchange FTX, which filed for bankruptcy on Friday.

Some crypto watchers scrutinizing the transaction speculated it was an attempt to fluff trading volumes. Complicating the hoopla, the analyst who first caught the transaction turned out to be an employee of rival exchange, Coinbase.

It also follows a blunder made in December when Crypto.com accidentally sent a woman in Australia $10.5 million instead of a $100 refund.

Crypto.com’s CEO Kris Marszalek said over Twitter that the transaction was as an accident, while a company spokesperson told Yahoo Finance that funds were intended to be sent to an offline cold storage crypto wallet, but mistakenly went to Gate.io, another crypto exchange.

Some crypto exchanges hold accounts with competitors to beef up liquidity during periods of volatility.

“Fund movements from Crypto.com custody systems are only possible between approved and whitelisted addresses attached to our cold wallets, our hot wallets (connected to the internet), and our corporate accounts at third-party exchanges,” the spokesperson said.

Still, the…