Technology

Crypto.com customers worry it could follow FTX as CEO tries to reassure them everything’s fine

Published

3 years ago

November 15, 2022

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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.

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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 skeptics can point to recent history.

FTX CEO Sam Bankman-Fried said his company’s assets were “fine” two days before he was desperate for a rescue because of a liquidity crunch. It’s a familiar tactic. Alex Mashinsky, CEO of the now bankrupt crypto lending platform, Celsius, reassured customers of solvency days before halting wtihdrawals and ultimately filing for bankruptcy.

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

Technology

Americans are heating their homes with bitcoin this winter

Published

19 hours ago

November 16, 2025

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Americans are heating their homes with bitcoin this winter

As winter’s chill settles in across the U.S., and electricity bills become a bigger budgeting issue, most Americans will rely on their usual sources of warmth, such as home heating oil, natural gas, and electric furnaces. But in a few cases, crypto is generating the heat, and if some of the nascent crypto heat industry’s proponents are correct, someday its use as a source within homes and buildings will be much more widespread.

Let’s start with the basics: the computing power of crypto mining generates a lot of heat, most which just ends up vented into the air. According to digital assets brokerage, K33, the bitcoin mining industry generates about 100 TWh of heat annually — enough to heat all of Finland. This energy waste within a very energy-intense industry is leading entrepreneurs to look for ways to repurpose the heat for homes, offices, or other locations, especially in colder weather months.

During a frigid snap earlier this year, The New York Times reviewed HeatTrio, a $900 space heater that also doubles as a bitcoin mining rig. Others use the heat from their own in-home cryptocurrency mining to spread warmth throughout their house.

“I’ve seen bitcoin rigs running quietly in attics, with the heat they generate rerouted through the home’s ventilation system to offset heating costs. It’s a clever use of what would otherwise be wasted energy,” said Jill Ford, CEO of Bitford Digital, a sustainable bitcoin mining company based in Dallas. “Using the heat is another example of how crypto miners can be energy allies if you apply some creativity to their potential,” Ford said.

It’s not necessarily going to save someone money on their electric bill — the economics will vary greatly from place to place and person to person, based on factors including local electricity rates and how fast a mining machine is — but the approach might make money to offset heating costs.

“Same price as heating the house, but the perk is that you are mining bitcoin,” Ford said.

A single mining machine — even an older model — is sufficient. Solo miners can join mining pools to share computing power and receive proportional payouts, making returns more predictable and changing the economic equation.

“The concept of using crypto mining or GPU compute to heat homes is clever in theory because almost all the energy consumed by computation is released as heat,” said Andrew Sobko, founder of Argentum AI, which is creating a marketplace for the sharing of computing power. But he added that the concept makes the most sense in larger settings, particularly in colder climates or high-density buildings, such as data centers, where compute heat shows real promise as a form of industrial-scale heat recapture.

To make it work — it’s not like you can transport the heat somewhere by truck or train — you have to identity where the computing heat is needed and route it to that place, such as co-locating GPUs in environments from industrial parks to residential buildings.

“We’re working with partners who are already redirecting compute heat into building heating systems and even agricultural greenhouse warming. That’s where the economics and environmental benefits make real sense,” Sobko said. “Instead of trying to move the heat physically, you move the compute closer to where that heat provides value,” he added.

Why skeptics say crypto home heating won’t work

There are plenty of skeptics.

Derek Mohr, clinical associate professor at the University of Rochester Simon School of Business, does not think the future of home heating lies in crypto and says even industrial crypto is problematic.

Bitcoin mining is so specialized now that a home computer, or even network of home computers, would have almost zero chance of being helpful in mining a block of bitcoin, according to Mohr, with mining farms use of specialized chips that are created to mine bitcoin much faster than a home computer.

“While bitcoin mining at home — and in networks of home computers — was a thing that had small success 10 years ago, it no longer is,” Mohr said.

“The bitcoin heat devices I have seen appear to be simple space heaters that use your own electricity to heat the room … which is not an efficient way to heat a house,” he said. “Yes, bitcoin mining generates a lot of heat, but the only way to get that to your house is to use your own electricity,” Mohr said.

He added that while running your computer non-stop would generate heat, it has a very low probability of successfully mining a bitcoin block.

“In my opinion, this is not a real opportunity that will work. Instead it is taking advantage of things people have heard of — excess heat from bitcoin mining and profits from mining — and is giving false hope that there is a way for an individual to benefit from this,” Mohr said.

But some experts say more widespread use of plug-and-play, free-standing mining rigs, might make the concept viable in more locations over time. In the least, they say it is worth studying the dual use economic and environmental benefits based on the underlying fact that crypto mining generates significant heat as a byproduct of the computer processing.

“How can we capture the excess heat from the operation to power something else? That could range from heating a home to warming water, even in a swimming pool. As a result, your operating efficiency is higher on your power consumption,” said Nikki Morris, the executive director of the Texas Christian University Ralph Lowe Energy Institute.

She says the concept of crypto heating is still in its earliest stages, and most people don’t yet understand how it works or what the broader implications could be. “That’s part of what makes it so interesting. At Texas Christian University, we see opportunities to help people build both the vocabulary and the business use feasibility with industry partners,” Morris said.

Because crypto mining produces a digital asset that can be traded, it introduces a new source of revenue from power consumption, and the power source could be anything from the grid to natural gas to solar to wind or battery generation, according to Morris. She cited charging an electric vehicle at mixed-use buildings or apartment complexes as an example.

“Picture a similar scenario where an apartment complex’s crypto mining setup produces both digital currency and usable heat energy. That opens the door to distributed energy innovation to a broader stakeholder base, an approach that could complement existing heating systems and renewable generation strategies,” Morris said.

There are many questions to explore, including efficiency at different scales, integration with other energy sources, regulatory considerations, and overall environmental impact, “but as these technologies evolve, it’s worth viewing crypto heating not just as a curiosity, but as a small window into how digital and physical energy systems might increasingly converge in the future,” Morris said.

Testing bitcoin heat in the real world

The crypto-heated future may be unfolding in the town of Challis, Idaho, where Cade Peterson’s company, Softwarm, is repurposing bitcoin heat to ward off the winter.

Several shops and businesses in town are experimenting with Softwarm’s rigs to mine and heat. At TC Car, Truck and RV Wash, Peterson says, the owner was spending $25 a day to heat his wash bays to melt snow and warm up the water.

“Traditional heaters would consume energy with no returns. They installed bitcoin miners and it produces more money in bitcoin than it costs to run,” Peterson said. Meanwhile, an industrial concrete company is offsetting its $1,000 a month bill to heat its 2,500-gallon water tank by heating it with bitcoin.

Peterson has heated his own home for two-and-a-half years using bitcoin mining equipment and believes that heat will power almost everything in the future. “You will go to Home Depot in a few years and buy a water heater with a data port on it and your water will be heated with bitcoin,” Peterson said.

Technology

These underperforming groups may deliver AI-electric appeal. Here’s why.

Published

2 days ago

November 15, 2025

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These underperforming groups may deliver AI-electric appeal. Here's why.

Reshoring and infrastructure products could be the next ETF play after AI, say ETF experts

Industrial and infrastructure stocks may soon share the spotlight with the artificial intelligence trade.

According to ETF Action’s Mike Atkins, there’s a bullish setup taking shape due to both policy and consumer trends. His prediction comes during a volatile month for Big Tech and AI stocks.

“You’re seeing kind of the old-school infrastructure, industrial products that have not done as well over the years,” the firm’s founding partner told CNBC’s “ETF Edge” this week. “But there’s a big drive… kind of away from globalization into this reshoring concept, and I think that has legs.”

Global X CEO Ryan O’Connor is also optimistic because the groups support the AI boom. His firm runs the Global X U.S. Infrastructure Development ETF (PAVE), which tracks companies involved in construction and industrial projects.

“Infrastructure is something that’s near and dear to our heart based off of PAVE, which is our largest ETF in the market,” said O’Connor in the same interview. “We think some of these reshoring efforts that you can get through some of these infrastructure places are an interesting one.”

The Global X’s infrastructure exchange-traded fund is up 16% so far this year, while the VanEck Semiconductor ETF (SMH), which includes AI bellwethers Nvidia, Taiwan Semiconductor and Broadcom, is up 42%, as of Friday’s close.

Both ETFs are lower so far this month — but Global X’s infrastructure ETF is performing better. Its top holdings, according to the firm’s website, are Howmet Aerospace, Quanta Services and Parker Hannifin.

Supporting the AI boom

He also sees electrification as a positive driver.

“All of the things that are going to be required for us to continue to support this AI boom, the electrification of the U.S. economy, is certainly one of them,” he said, noting the firm’s U.S. Electrification ETF (ZAP) gives investors exposure to them. The ETF is up almost 24% so far this year.

The Global X U.S. Electrification ETF is also performing a few percentage points better than the VanEck Semiconductor ETF for the month.

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Technology

How tariffs and AI are giving secondhand platforms like ThredUp a boost

Published

2 days ago

November 15, 2025

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How tariffs and AI are giving secondhand platforms like ThredUp a boost

At ThredUp‘s 600,000-square-foot warehouse in Suwanee, Georgia, roughly 40,000 pieces of used clothing are processed each day. The company’s logistics network — four facilities across the U.S. — now rivals that of some fast-fashion giants.

“This is the largest garment-on-hanger system in the world,” said Justin Pina, ThredUp’s senior director of operations. “We can hold more than 3.5 million items here.”

Secondhand shopping is booming. The global secondhand apparel market is expected to reach $367 billion by 2029, growing almost three times faster than the overall apparel market, according to GlobalData.

President Donald Trump’s tariffs were billed as a way to bring manufacturing back home. But the measures hit one of America’s most import-dependent industries: fashion.

About 97 percent of clothing sold in the U.S. is imported, mostly from China, Vietnam, Bangladesh and India, according to the American Apparel and Footwear Association.

For years, Gen Z shoppers have been driving the rise of secondhand fashion, but now more Americans are catching on.

“When tariffs raise those costs, resale platforms suddenly look like the smart buy. This isn’t just a fad,” said Jasmine Enberg, co-CEO of Scalable. “Tariffs are accelerating trends that were already reshaping the way Americans shop.”

For James Reinhart, ThredUp’s CEO, the company is already seeing it play out.

“The business is free-cash-flow positive and growing double digits,” said Reinhart. “We feel really good about the economics, gross margins near 80% and operations built entirely within the U.S.”

ThredUp reported that revenue grew 34% year over year in the third quarter. The company also said it acquired more new customers in the quarter than at any other time in its history, with new buyer growth up 54% from the same period last year.

“If tariffs add 20% to 30% to retail prices, that’s a huge advantage for resale,” said Dylan Carden, research analyst at William Blair & Company. “Pre-owned items aren’t subject to those duties, so demand naturally shifts.”

Inside the ThredUp warehouse, where CNBC got a behind-the-scenes look. automation hums alongside human workers. AI systems photograph, categorize, and price thousands of garments per hour. For Reinhart, the technology is key to scaling resale like retail.

“AI has really accelerated adoption,” said Reinhart. “It’s helping us improve discovery, styling, and personalization for buyers.”

That tech wave extends beyond ThredUp. Fashion-tech startups Phia, co-founded by Phoebe Gates and Sophia Kianni, is using AI to scan thousands of listings across retail and resale in seconds.

“The fact that we’ve driven millions in transaction volume shows how big this need is,” Gates said. “People want smarter, cheaper ways to shop.”

ThredUp is betting that domestic infrastructure, automation, and AI will keep it ahead of the curve, and that tariffs meant to revive U.S. manufacturing could end up powering a new kind of American fashion economy.

“The future of fashion will be more sustainable than it is today,” said Reinhart. “And secondhand will be at the center of it.”

Watch the video to learn more.