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The logo of Crypto.com is seen at a stand during the Bitcoin Conference 2022 in Miami Beach, Florida, April 6, 2022.

Marco Bello | Reuters

As the crypto universe reckons with the fallout of FTX’s rapid collapse last week and tries to figure out where the contagion may head next, questions have been swirling around Crypto.com, a rival exchange that’s taken a similarly flashy approach to marketing and celebrity endorsements.

Like FTX, which filed for bankruptcy protection on Friday, Crypto.com is privately held, based outside the U.S. and offers a range of products for buying, selling, trading and storing crypto. The company is headquartered in Singapore, and CEO Kris Marszalek is based in Hong Kong.

Crypto.com is smaller than FTX but still ranks among the top 15 global exchanges, according to CoinGecko. FTX spooked the market not just by its speedy downfall but also because the company was unable to honor withdrawal requests, to the tune of billions of dollars, from users who wanted to retrieve their funds during the run on the firm. When it became clear that FTX didn’t have the liquidity necessary to give users their money, concern mounted that rivals may be next.

Twitter lit up over the weekend with speculation that Crypto.com was facing problems, and crypto experts held Twitter Spaces sessions to discuss the matter. Meanwhile, revelations landed on Sunday that, in October, Crypto.com mistakenly sent more than 80% of its ether holdings, or about $400 million worth of the cryptocurrency, to Gate.io, another crypto exchange. It was only after the transaction was exposed through public blockchain data that Marszalek acknowledged the mishap.

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

Paul Yeung | Bloomberg | Getty Images

Changpeng Zhao, CEO of rival exchange Binance, fanned the flames of speculation, tweeting on Sunday that if an exchange has to move large amounts of crypto before or after it demonstrates the wallet addresses, “it is a clear sign of problems.” He added, “Stay away.”

Confidence is clearly shaken. Crypto.com’s native Cronos (CRO) token has dropped nearly 40% in the last week. The crumbling of FTX’s FTT token was one sign of the crisis that company faced.

“I would just get your money out of Crypto .com now,” said Adam Cochran, an investor in blockchain projects and founder of Cinneamhain Ventures, in a tweet over the weekend. “If they are full reserves they shouldn’t care if you sit on the sidelines for a week, but their handling of this hasn’t met the bar.”

Marszalek has spent the early part of the week trying to reassure users and regulators that the business is fine. On Monday, he said on YouTube that the company had a “tremendously strong balance sheet” and that it’s “business as usual” with deposits, withdrawals and trading activity. He followed up with a tweet Monday evening, indicating that “the withdrawal queue is down 98% within the last 24 hours.”

He spoke to CNBC’s “Squawk Box” on Tuesday morning, answering questions about the state of his company, the market and how he’s differently positioned than FTX. He said in the interview that the company has engaged with over 10 regulators about the “shocking events” surrounding FTX and how to keep them from happening again.

“I understand that right now in the market, you’ve got a situation where everyone is done taking people’s word for anything,” Marszalek said. “We focused on demonstrating our strength and stability through our actions.”

Marszalek acknowledged that Crypto.com, like other exchanges, has faced increased withdrawals since the FTX news broke, but he said his platform has since stabilized.

A familiar refrain

The exterior of Crypto.com Arena on January 26, 2022 in Los Angeles, California.

Rich Fury | Getty Images

There are other similarities, too.

Just as FTX signed a massive deal last year with the NBA’s Miami Heat for naming rights to the team’s arena, Crypto.com agreed to pay $700 million last November to put its name and logo on the arena that hosts the Los Angeles Lakers, among other teams in L.A. FTX had Tom Brady and Steph Curry promoting its products. Crypto.com reeled in Matt Damon as a pitchman. Both companies bought Super Bowl ads and partnered with Formula One.

Marszalek has personal issues from his past that may also be concerning. The Daily Beast reported in November 2021 that Marszalek departed his last job “amid accusations from customers and business partners that they had been ripped off.” The Australian company was called Ensogo, and it offered online coupons. It abruptly shut down in 2016.

According to documents filed with the Australian Securities Exchange, Ensogo requested its stock be suspended from trading in June 2016. The board accepted Marszalek’s resignation at that time and the company said in a filing that it “is yet to announce the appointment of a new CEO.”

A spokesperson for Crypto.com told the Daily Beast that the board decided to shutter Ensogo, and “there was never a finding of wrongdoing under Kris’s leadership.”

How many coins?

Then there are Crypto.com’s books.

Last week, Crypto.com released unaudited information about its assets to blockhain analytics firm Nansen, who used the information to create a chart showing where those assets were held. One startling revelation: Crypto.com had 20% of its assets in wallets in shiba inu, a so-called “meme token” that exists purely for speculation, building off the shiba-inu dog image of the similarly popular joke token, dogecoin.

Marszalek said on Monday that this was just a reflection of the assets Crypto.com customers were buying. He said in a tweet that it was a popular purchase in 2021, along with dogecoin.

When asked by CNBC on Tuesday if Crypto.com holds tokens on its balance sheet, Marszalek said it’s a “very conservatively run business” that holds “mostly fiat and stablecoins as our source of capital.”

“Yeah but how much?” asked CNBC’s Becky Quick, reminding Marszalek that FTX had “billions of dollars” in its self-created FTT token before it declared bankruptcy.

Marszalek declined to say.

“We’re a privately held company,” he said, adding that he’s not going to provide specifics “about our balance sheet.”

He was quick to say that the company is “very well capitalized,” and reiterated comments from his YouTube session on Monday, telling CNBC that the company has “a very strong balance sheet” with “zero debt and zero leverage in the business, and we are cash flow positive.”

The company has already been hammered during the crypto winter, which has pushed bitcoin and ether down by two-thirds this year. In recent months, Crypto.com reportedly slashed over one-quarter of its workforce. Daily trading volume in CRO is down to about $365 million, according to data from Nomics. Last year, that figure was above $4 billion.

Marszalek’s main goal now is evident: avoid an FTX-type run that could see the company lose a boatload of customers. But he also wants to make it abundantly clear that all the reserves are available to honor any withdrawal requests, and that there’s no hedge fund activity taking place with user deposits.

“We run a very simple business,” he said. “We give 70 million users globally access to digital currencies and take a fee for that.”

Coinbase and Binance have similarly been on media tours trying to assuage customer concerns.

FTX saga means people will increasingly hold their own crypto, says Blockchain.com CEO

Blockchain.com CEO Peter Smith expects the whole way that crypto enthusiasts hold their investments to change dramatically. Smith, whose company operates an exchange and offers a crypto wallet, told CNBC last week that consumers don’t need to trust third parties to hold their crypto funds, and are increasingly doing it themselves.

“You’re going to see people shift toward crypto on their own private keys,” Smith said, adding that the company has about 85 million users who already do it that way. “The ultimate reality and coolest part of crypto is you can store your funds on your own private key where you have no counterparty exposure.”

From a governance standpoint, FTX was uniquely troubled. The company had no board, no finance chief and no head of compliance, despite raising billions of dollars, some from top firms like Sequoia and Tiger Global, and racing to a $32 billion valuation.

Marszalek has a more traditional corporate structure. Crypto.com has a four-person advisory board as well as a CFO, a head of legal and a senior vice president of risk and operations. That doesn’t mean there can’t be fraud (see: Theranos) or bad behavior (read: WeWork), but it’s at least a sign that some controls are in place as Crypto.com and other players try to weather a crypto winter that keeps getting colder.

“We feel quite good about where we are as a company and our operations,” said Marszalek, pointing out that the company generated over $1 billion in revenue last year and has topped that number this year. “What worries me is the impact of this collapse on the whole industry. It sets us back a good couple of years in terms of the industry’s reputation.”

WATCH: CNBC’s full interview with Crypto.com CEO Kris Marszalek

Watch CNBC's full interview with Crypto.com CEO Kris Marszalek

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Harris agrees to potential CNN debate with Trump on Oct. 23

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Harris agrees to potential CNN debate with Trump on Oct. 23

U.S. Vice President Kamala Harris, the Democratic presidential nominee, speaks at the Cobb Energy Performing Arts Centre in Atlanta on Sept. 20, 2024. Harris spoke about abortion and reproductive rights in Georgia as she continues to campaign against Republican presidential nominee, former U.S. President Donald Trump.

Joe Raedle | Getty Images News | Getty Images

Vice President Kamala Harris said on Saturday that she would be open to debating former President Donald Trump for a second time in October, ahead of the November U.S. presidential election.

Jen O’Malley Dillon, chair of Harris and vice presidential nominee Tim Walz’s campaign, said in a statement that Harris has accepted CNN’s invitation to a debate on Oct. 23. That would be less than two weeks before the election.

“I will gladly accept a second presidential debate on October 23. I hope @realDonaldTrump will join me,” Harris wrote in an X post.

It isn’t the first time the Harris camp has proposed another match. Shortly after Harris and Trump held a debate hosted by ABC News earlier this month, O’Malley Dillon said Harris was ready for round two against him. But as Harris was raising millions of dollars following the campaign, Trump declined to face her again.

In a post on the Trump Media & Technology Group’s social network, Truth Social, the Republican presidential nominee said there would be “no third debate.”

On Saturday, a Trump campaign spokesperson referred CNBC back to Trump’s Truth Social post about there being no third debate.

“She’s done one debate,” Trump said at a rally in Wilmington, North Carolina, on Saturday. “I’ve done two. It’s too late to do another. I’d love to, in many ways, but it’s too late. The voting is cast.”

The first 2024 debate for Trump was against the current president, Joe Biden. CNN ran the event in June. But Biden struggled on the debate stage. Democratic donors expressed concerns about Biden’s prospects, and Democratic members of Congress called on Biden to end his election bid. In August, Harris accepted the presidential nomination at the Democratic National Convention.

“Donald Trump should have no problem agreeing to this debate,” O’Malley Dillon wrote in her statement. “It is the same format and setup as the CNN debate he attended and said he won in June, when he praised CNN’s moderators, rules and ratings.”

— CNBC’s Rebecca Picciotto contributed to this report.

WATCH: Harris won the debate but didn’t move the needle on voter decisions, says Pimco’s Libby Cantrill

Harris won the debate but didn't move the needle on voter decisions, says Pimco's Libby Cantrill

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Intel’s wild week leaves Wall Street more uncertain than ever about chipmaker’s future

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Intel's wild week leaves Wall Street more uncertain than ever about chipmaker's future

Intel CEO Patrick Gelsinger speaks at the Intel Ocotillo Campus in Chandler, Arizona, on March 20, 2024. 

Brendan Smialowski | AFP | Getty Images

It was quite a week for Intel.

The chipmaker, which has lost over half its value this year and last month had its worst day on the market in 50 years after a disappointing earnings report, started the week on Monday by announcing that it’s separating its manufacturing division from the core business of designing and selling computer processors.

And late Friday, CNBC confirmed that Qualcomm has recently approached Intel about a takeover in what would be one of the biggest tech deals ever. It’s not clear if Intel has engaged in conversations with Qualcomm, and representatives from both companies declined to comment. The Wall Street Journal was first to report on the matter.

The stock rose 11% for the week, its best performance since November.

The rally provides little relief to CEO Pat Gelsinger, who has had a tough run since taking the helm in 2021. The 56-year-old company lost its long-held title of world’s biggest chipmaker and has gotten trounced in artificial intelligence chips by Nvidia, which is now valued at almost $3 trillion, or more than 30 times Intel’s market cap of just over $90 billion. Intel said in August that it’s cutting 15,000 jobs, or more than 15% of its workforce.

But Gelsinger is still calling the shots and, for now, he says Intel is pushing forward as an independent company with no plans to spin off the foundry. In a memo to employees on Monday, he said the two halves are “better together,” though the company is setting up a separate internal unit for the foundry, with its own board of directors and governance structure and the potential to raise outside capital.

Intel CEO Pat Gelsinger speaks while showing silicon wafers during an event called AI Everywhere in New York, Thursday, Dec. 14, 2023.

Seth Wenig | AP

For the company that put the silicon in Silicon Valley, the road to revival isn’t getting any smoother. By forging ahead as one company, Intel has to two clear two gigantic hurdles at once: Spend more than $100 billion through 2029 to build chip factories in four different states, while simultaneously gaining a foothold in the AI boom that’s defining the future of technology.

Intel expects to spend roughly $25 billion this year and $21.5 billion next year on its foundries in hopes that becoming a domestic manufacturer will convince U.S. chipmakers to onshore their production rather than relying on Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung.

That prospect would be more palatable to Wall Street if Intel’s core business was at the top of its game. But while Intel still makes the majority of processors at the heart of PCs, laptops, and servers, it’s losing market share to Advanced Micro Devices and reporting revenue declines that threaten its cash flow.

‘Next phase of this foundry journey’

With challenges mounting, the board met last weekend to discuss the company’s strategy.

Monday’s announcement on the new governance structure for the foundry business served as an opening salvo meant to convince investor that serious changes are underway as the company prepares to launch its manufacturing process, called 18A, next year. Intel said it has seven products in development and that it landed a giant customer, announcing that Amazon would use its foundry to produce a networking chip.

“It was very important to say we’re moving to the next phase of this foundry journey,” Gelsinger told CNBC’s Jon Fortt in an interview. “As we move to this next phase, it’s much more about building efficiency into that and making sure that we have good shareholder return for those significant investments.”

Still, Gelsinger’s foundry bet will take years to pay off. Intel said in the memo that it didn’t expect meaningful sales from external customers until 2027. And the company will also pause its fabrication efforts in Poland and Germany “by approximately two years based on anticipated market demand,” while pulling back on its plans for its Malaysian factory. 

TSMC is the giant in the chip fab world, manufacturing for companies including Nvidia, Apple and Qualcomm. Its technology allows fabless companies — those that outsource manufacturing — to make more powerful and efficient chips than what’s currently possible at volume inside Intel’s factories. Even Intel uses TSMC for some of its high-end PC processors.

Intel hasn’t announced a significant traditional American semiconductor customer for its foundry, but Gelsinger said to stay tuned.

“Some customers are reluctant to give their names because of the competitive dynamics,” Gelsinger told Fortt. “But we’ve seen a large uptick in the amount of customer pipeline activity we have underway.”

Prior to the Amazon announcement, Microsoft said earlier this year it would use Intel Foundry to produce custom chips for its cloud services, an agreement that could be worth $15 billion to Intel. Microsoft CEO Satya Nadella said in February that it would use Intel to produce a chip, but didn’t provide details. Intel has also signed up MediaTek, which primarily makes lower-end chips for mobile phones.

U.S. President Joe Biden listens to Intel CEO Pat Gelsinger as he attends the groundbreaking of the new Intel semiconductor manufacturing facility in New Albany, Ohio, U.S., September 9, 2022.

Joshua Roberts | Reuters

Backed by the government

Intel’s biggest champion at the moment is the U.S. government, whish is pushing hard to secure U.S.-based chip supply and limit the country’s reliance on Taiwan.

Intel said this week that it received $3 billion to build chips for the military and intelligence agencies in a specialized facility called a “secure enclave.” The program is classified, so Intel didn’t share specifics. Gelsinger also recently met with Commerce Secretary Gina Raimondo, who is loudly promoting Intel’s future role in chip production.

Earlier this year, Intel was awarded up to $8.5 billion in CHIPS Act funding from the Biden administration and could receive an additional $11 billion in loans from the legislation, which was passed in 2022. None of the funds have been distributed yet. 

“At the end of the day, I think what policymakers want is for there to be a thriving American semiconductor industry in America,” said Anthony Rapa, a partner at law firm Blank Rome who focuses on international trade.

For now, Intel’s biggest foundry customer is itself. The company started reporting the division’s finances this year. For the latest quarter, which ended in June, it had an operating loss of $2.8 billion on revenue of $4.3 billion. Only $77 million in revenue came from external customers.

Intel has a goal of $15 billion in external foundry revenue by 2030.

While this week’s announcement was viewed by some analysts as the first step to a sale or spinoff, Gelsinger said that it was partially intended to help win new customers that may be concerned about their intellectual property leaking out of the foundry and into Intel’s other business.

“Intel believes that this will provide external foundry customers/suppliers with clearer separation,” JPMorgan Chase analysts, who have the equivalent of a sell rating on the stock, wrote in a report. “We believe this could ultimately lead to a spin out of the business over the next few years.”

No matter what happens on that side of the house, Intel has to find a fix for its main business of Core PC chips and Xeon server chips.

Intel’s client computing group — the PC chip division — reported about a 25% drop in revenue from its peak in 2020 to last year. The data center division is down 40% over that stretch. Server chip volume decreased 37% in 2023, while the cost to produce a server product rose.

Intel has added AI bits to its processors as part of a push for new PC sales. But it still lacks a strong AI chip competitor to Nvidia’s GPUs, which are dominating the data center market. The Futurum Group’s Daniel Newman estimates that Intel’s Gaudi 3 AI accelerator only contributed about $500 million to the company’s sales over the last year, compared with Nvidia’s $47.5 billion in data center sales in its latest fiscal year.

Newman is asking the same question as many Intel investors about where the company goes from here.

“If you pull these two things apart, you go, ‘Well, what are they best at anymore? Do they have the best process? Do they have the best design?'” he said. “I think part of what made them strong was that they did it all.”

— CNBC’s Rohan Goswami contributed to this report

WATCH: CNBC’s full interview with Intel CEO Pat Gelsinger

Watch CNBC's full interview with Intel CEO Pat Gelsinger

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How Elon Musk hopes his new supercomputers will boost his businesses

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How Elon Musk hopes his new supercomputers will boost his businesses

Elon Musk is on a mission to build new supercomputers. As the CEO of Tesla and his new artificial intelligence startup xAI, the tech titan has big plans for how artificial intelligence can help to supercharge his businesses.

In January, he wrote on X that Tesla should be viewed as an AI/robotics company rather than a car company. Tesla’s custom-built supercomputer named Dojo is key to this transformation. Tesla has said it plans to spend $500 million to build the supercomputer in Buffalo, New York. Tesla is also building another supercomputer cluster, called Cortex, at the company’s headquarters in Austin, Texas.

Dojo will process and train AI models using the large amounts of video and data captured by Tesla cars. The goal is to improve Tesla’s suite of driver assistance features, which the company calls Autopilot, and its more robust Full Self-Driving or FSD system. Subscriptions to Tesla’s FSD features cost $99 a month and include automatic lane changes, automatic parking and automatic stopping for traffic lights and stop signs.

“They’ve sold what is it, 5 million plus cars. Each one of those cars typically has eight cameras plus in it. And if you think then that those cars are driving around, let’s just say 10,000 miles a year on average, they’re streaming all of that video back to Tesla,” says Steven Dickens, chief technology advisor at the Futurum Group. “So what can they do with that training set? Obviously they can develop Full Self-Driving and they’re getting close to that.”

Despite their names, neither Autopilot nor FSD make Tesla vehicles autonomous and require active driver supervision, as Tesla states on its website. In the past, the company has garnered scrutiny from regulators who say that Tesla falsely advertised the capabilities of its Autopilot and FSD systems. But reaching full autonomy is critical for Tesla, whose sky-high valuation is largely dependent on bringing robotaxis to market, some analysts say.

The company reported lackluster results in its latest earnings report and has fallen behind other automakers working on autonomous vehicle technology. These include Alphabet-owned Waymo, which is already commercially operating fully autonomous taxis in several U.S. cities, GM’s Cruise and Amazon’s Zoox. In China, competitors include Didi and Baidu.

Tesla hopes Dojo, which Musk says has been running tasks for Tesla since 2023, will change that. A Tesla robotaxi event originally scheduled for August is now expected to occur in early October.

Dojo can also be useful for training Tesla’s humanoid robot, Optimus, which the company plans to use in its factories starting next year. Musk has said that Tesla plans to spend $10 billion this year on AI.

Musk is also betting on supercomputers to run his new AI venture xAI. Musk launched xAI in 2023 to develop large language models and AI products, like its chatbot Grok, as an alternative to AI tools created by OpenAI, Microsoft and Google.

Despite being one of its founders, Elon Musk left OpenAI in 2018 and has since become one of the company’s harshest critics. In June, it was announced that xAI would build a supercomputer in Memphis, Tennessee to train Grok. In early September, Musk revealed that a portion of the Memphis supercomputer, called Colossus, was already online.

To learn more about Elon Musk’s supercomputer plans, watch the video.

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