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Kris Marszalek, CEO of Crypto.com, speaking at a 2018 Bloomberg event in Hong Kong, China.

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The boss of cryptocurrency exchange Crypto.com took to YouTube Monday to reassure users of his platform after the stunning collapse of rival firm FTX sparked fears of a market contagion.

In an “AMA” (ask me anything) on YouTube, the platform’s CEO Kris Marszalek said that his company had a “tremendously strong balance sheet” and that it wasn’t engaged in the kinds of practices that led to the downfall of Sam Bankman-Fried’s FTX last week.

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“Our platform is performing business as usual,” Marszalek said in the AMA. “People are depositing, people are withdrawing, people are trading, there’s pretty much normal activity just at a heightened level.”

FTX filed for Chapter 11 bankruptcy protection on Friday after concerns over the company’s financial health resulted in a run on the exchange and a plunge in the value of its native FTT token. FTX tried to reach a deal to be acquired by Binance, the largest venue for trading digital assets, but this fell apart after Binance backed out citing reports of mishandled customer funds and alleged U.S. government investigations into FTX.

Alameda Research, FTX’s sister company, borrowed billions in customer funds from the exchange to ensure it had enough funds on hand to process withdrawals, CNBC reported Sunday. Bankman-Fried declined to comment on allegations of misappropriating customer funds but said its recent bankruptcy filing was the result of issues with a leveraged trading position.

“We never engage as a company in any irresponsible lending practices, we never took any third-party risks,” Marszalek said Monday. “We do not run a hedge fund, we do not trade customers’ assets. We always had 1-to-1 reserves,” he added.

Binance, Crypto.com CEOs race to reassure customers funds are safe

His comments come after the revelation Sunday that Crypto.com mistakenly sent $400 million worth of the ether cryptocurrency to Gate.io, another crypto exchange, in October, a mishap that raised fears Crypto.com users’ funds may be at risk.

Crypto.com and Gate.io said they were sent by mistake and were quickly returned to Crypto.com after the error was identified. Marszalek tweeted Sunday that the firm had meant to send the funds to its “cold wallet” — meaning an offline cryptocurrency wallet — but were instead moved to a whitelisted corporate account with Gate.io. In its own statement, Gate.io said the transactions were the result of an “operation error transfer” and that all assets have since been returned to Crypto.com.

“In this particular case the whitelisted address belonged to one of our corporate accounts in a 3rd party exchange instead of our cold wallet,” he added. “We have since strengthened our process and systems to better manage these internal transfers.”

That did little to assuage investor concerns, however, with traders speculating Crypto.com may be facing liquidity issues of its own and dipping into customer funds after the FTX collapse. Marszalek pushed back on claims it was misappropriating users’ funds Monday, stating in the AMA that “we do not trade customers’ assets.”

“We will just continue with our business as usual, and we will prove all the naysayers – and there is many of these right now on Twitter in the last couple of days – we’ll prove them all wrong with our actions,” Marszalek said.

“We’ll continue operating as we have always operated to continue being a safe and secure place where everybody can access crypto.”

Analysis of public blockchain data shared with CNBC by data firm Argus shows that, from 7 p.m. ET Saturday through 6.30 a.m. ET Monday, a net $68 million in ether and $120 million in other tokens was withdrawn from Crypto.com by its users. Over that same timeframe, Crypto.com added $62 million in ether and $140 million of other digital assets to meet the withdrawals, according to Argus.

“To its credit, Crypto.com continues to have the funds to meet these withdrawals, lending further credence to its CEO’s claims that their assets are backed 1:1,” Owen Rapaport, co-founder and CEO of Argus, told CNBC via email.

Crypto.com is one of numerous exchanges that have committed to providing a breakdown of the reserves that back customer assets to reassure users after the bankruptcy of FTX.

Marszalek said he expects Crypto.com to publish an audited “proof of reserves” within the next 30 days. He said he understands users’ wish to see the audit released sooner, but that auditing firms “don’t operate on crypto speed.”

“The objective of the audit is to verify independently that every single coin on the platform is matched by our reserves,” he said.

Last week, an unaudited proof of reserves handled by blockchain analysis firm Nansen showed that Crypto.com held 20% of its assets in shiba inu, a so-called “meme token.” Asked about this Monday, Marszalek said this was just a reflection of the assets Crypto.com customers were buying.

“We store whatever our customers buy and it so happens that last year doge and shib were two extremely hot meme coins,” he said. “As long as our users are holding it, we will be holding it. We have no control over what you guys buy.”

He added that Crypto.com has never used its CRO token as collateral for any loans in its history. A source told CNBC previously that Bankman-Fried’s Alameda was borrowing from FTX and using the exchange’s FTT token to back those loans.

Marszalek admitted that Crypto.com had transferred $1 billion to FTX over a year but that this was aimed at “hedging” customers’ orders. Crypto.com “only had exposure of under $10 million when FTX shut down,” he added.

“The way the brokerage part of our business works is that, every time a customer places an order to buy or sell, we have multiple venues where we could hedge this order and we pick the most cost efficient one with [the] best liquidity, lowest cost so we can pass on these savings to our customers,” Crypto.com‘s CEO said.

“This means that we are not taking any market risk, we are always market neutral. But it also means there must be fund flows between our venue and other venues in the industry and FTX was one of them.”

Crypto.com has 70 million users globally and made revenues of $1 billion annually in both 2021 and 2022, according to Marszalek. The company made headlines in 2021 for some mega marketing deals, including the rebranding of the Staples Center sports stadium to Crypto.com Arena and a commercial featuring celebrity actor Matt Damon.

– CNBC’s Kate Rooney and Paige Tortorelli

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Bitcoin hits $80,000 for the first time as crypto traders bask in Trump election victory

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Bitcoin hits ,000 for the first time as crypto traders bask in Trump election victory

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Cryptocurrencies extended their rally on Sunday, with bitcoin touching $80,000 for the first time ever.

The price of the flagship cryptocurrency was last higher by 4.5% at $79,800.19, according to Coin Metrics. Ether rose 3%, after passing the $3,000 level on Saturday. It last changed hands at $3,203.10.

Smaller coins saw bigger moves as investors continued to digest the implications of a second term for President-elect Donald Trump. The payments coin XRP surged 11%. The decentralized finance token tied to Cardano rocketed 40%. Memecoins dogecoin and Shiba Inu coin soared 17% and 31%, respectively.

“Crypto is poised to enter a golden era,” Alex Thorn, head of research at Galaxy Digital, said in a research note Friday. “Trump has promised to make America the ‘crypto capital of the world’ and his high level team is filled with strong crypto advocates … . The pro-crypto nature of his team, family, and donors increases the likelihood that Trump follows through on his campaign promises to the industry.”

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Bitcoin touches $80,000 on Sunday for the first time ever.

Bitcoin was deemed a safe asset regardless of the outcome of the election — it is not considered a security, even by the Securities and Exchange Commission, and Trump has made big overtures about bitcoin like entertaining the idea of a strategic national bitcoin reserve and speaking about the need to keep all bitcoin mined in America.

Ether and other cryptocurrencies, however, stand to gain much more from the crypto-friendly regulatory environment that Trump has promised and appears to be a priority for many in his inner circle. For example, one reason the spot bitcoin ETFs didn’t see as much success as bitcoin ETFs is because they don’t distribute staking rewards. Many in the industry are hopeful that will change next year.

“In this environment, over the next two years we expect that bitcoin and other digital assets will trade significantly higher than the current all-time high,” Thorn said. “What was once an oppressive headwind in the world’s largest capital market will now shift to a tailwind, and no one is bullish enough.”

Bitcoin and ether have gained 18% and 32%, respectively, since election day. Coinbase rose 48% last week, its best week since January 2023.

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ChatGPT rejected more than 250,000 image generations of presidential candidates prior to Election Day

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ChatGPT rejected more than 250,000 image generations of presidential candidates prior to Election Day

In this photo illustration, the OpenAI logo is displayed on a mobile phone screen with a photo of Sam Altman, CEO of OpenAI.

Didem Mente | Anadolu | Getty Images

OpenAI estimates that ChatGPT rejected more than 250,000 requests to generate images of the 2024 U.S. presidential candidates in the lead up to Election Day, the company said in a blog on Friday.

The rejections included image-generation requests involving President-elect Donald Trump, Vice President Kamala Harris, President Joe Biden, Minnesota Gov. Tim Walz and Vice President-elect JD Vance, OpenAI said.

The rise of generative artificial intelligence has led to concerns about how misinformation created using the technology could affect the numerous elections taking place around the world in 2024. 

The number of deepfakes has increased 900% year over year, according to data from Clarity, a machine learning firm. Some included videos that were created or paid for by Russians seeking to disrupt the U.S. elections, U.S. intelligence officials say.

In a 54-page October report, OpenAI said it had disrupted “more than 20 operations and deceptive networks from around the world that attempted to use our models.” The threats ranged from AI-generated website articles to social media posts by fake accounts, the company wrote. None of the election-related operations were able to attract “viral engagement,” the report noted.

In its Friday blog, OpenAI said it hadn’t seen any evidence that covert operations aiming to influence the outcome of the U.S. election using the company’s products were able to successfully go viral or build “sustained audiences.”

Lawmakers have been particularly concerned about misinformation in the age of generative AI, which took off in late 2022 with the launch of ChatGPT. Large language models are still new and routinely spit out inaccurate and unreliable information.

“Voters categorically should not look to AI chatbots for information about voting or the election — there are far too many concerns about accuracy and completeness,” Alexandra Reeve Givens, CEO of the Center for Democracy & Technology, told CNBC last week.

WATCH: AI likely to be less regulated and more volatile under second Trump presidency

AI likely to be less regulated and more volatile under second Trump presidency

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Tesla hits $1 trillion market cap as stock rallies after Trump win

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Tesla hits  trillion market cap as stock rallies after Trump win

Elon Musk on stage before Republican presidential nominee former President Donald Trump speaks at a rally at Madison Square Garden in New York, NY on Sunday, October 27, 2024. 

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Shares of Tesla climbed more than 6% in midmorning trading Friday, pushing the electric vehicle maker’s market cap past $1 trillion.

The company’s stock has rallied about 27% this week after Donald Trump won the U.S. presidential election and investors have grown optimistic that the former leader’s return to the White House could benefit Tesla. Elon Musk, Tesla’s CEO, has been a key ally for Trump throughout his campaign, pouring at least $130 million into a pro-Trump campaign effort.

Tesla had a market cap of $807.1 billion through Tuesday’s close. Before this week’s rally, shares of the carmaker were up about 1% for the year. Tesla’s stock is now up about 27% year to date.

Tesla market cap

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Tesla rejoins a growing club of tech names that are now worth more than $1 trillion, including Nvidia, Apple, Microsoft, AlphabetAmazon and Meta (though all but Meta are worth more than $2 trillion). Tesla’s market cap first crossed the $1 trillion mark in October 2021.

Wedbush Securities analyst Dan Ives has said that a potential Trump administration could spell less regulation for Tesla and other companies.

“Tesla has the scale and scope that is unmatched in the EV industry and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players (BYDNio, etc.) from flooding the U.S. market over the coming years,” Ives wrote in a note to clients this week.

Trump has said previously he may cut the federal $7,500 electric vehicle tax credit. Those credits have helped to drive sales of Tesla vehicles historically.

In its most recent earnings update, Tesla reported revenue of $25.18 billion and net income of $2.17 billion in the third quarter.

CEO Musk said on the earnings call that his “best guess” was that “vehicle growth” would reach 20% to 30% next year, due to “lower cost vehicles” and the “advent of autonomy.”

Tesla has been promising, and developing, driverless vehicle technology for more than a decade. Its key U.S. competitor, Alphabet-owned Waymo, has pulled ahead and is already operating commercial robotaxi services in several major cities.

On the third-quarter call, Musk said he would use his sway with a Trump-Vance administration to establish a “federal approval process for autonomous vehicles.” Currently, approvals happen at the state level, which the CEO sees as a regulatory hurdle Tesla will need to overcome once it finally offers more than partially automated driving systems.

— CNBC’s Lora Kolodny contributed to this report.

Correction: This story has been updated to correct the year Tesla’s market cap crossed $1 trillion for the first time. Tesla’s net income was $2.17 billion in the third quarter. An earlier version misstated the figure.

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