In the wake of the week’s events, leading exchange and crypto services provider Crypto.com will publish audited proof of reserves next week, and today released proof of a portion of their reserves via cold wallet addresses
While the Proof of Reserves audit preparation is underway, we are sharing our cold wallet addresses for some of the top assets on our platform.
This represents only a portion of our reserves: about 53,024 BTC, 391,564 ETH, and combined with other assets for a total of ~US$ 3.0b
— Kris | Crypto.com (@kris) November 11, 2022
The crypto markets are still reeling from the failure of FTX, but there is no reason to think that the industry as a whole will go the same way FTX and SBF did.
Much like the early days of the US capital markets, the crypto markets simply don’t have an evolved regulatory structure, or central banks to backstop markets. In a situation like this, the only thing that can assure confidence is full transparency, and independent oversight.
Make no mistake, there will be more fallout in the crypto sector, but established players like Crypto.com understand that in order to avoid further bloodletting, it is time to step up, and create transparency for traders and investors.
A Long History of Quality
In addition to being an innovator in the crypto space, Crypto.com has created a track record of quality service, and reliable corporate actions. Crypto.com has operated a full service exchange for many years, and also provides financial services with its Crypto.com debit card.
When the markets smell blood, anything in the water seems like a good target for the next shark attack.
There are likely to be more problems ahead, but a company that gives investors access to all its financial information should be in the best position possible given the situation.
One good thing about the crypto markets is that they are not running on a fractional reserve system, and there are no gatekeepers. This means that an upright company should have ample liquidity to cover its obligations to both its retail clients, and counterparties.
With the forthcoming audit, Crypto.com will be able to show markets and clients its financial position is sound, and it can maintain operations in a stressful environment.
The Pain of Opportunity
Wednesday, November 9, 2022, was a wild day for crypto markets.
Liquidity is clearly strained, and top tier platforms like Solana saw token values plunge from $24, to as low as $12 on an intraday basis. That hurts. Anyone who was playing with leveraged positions on the long side probably got wasted.
It is these kinds of markets that make and break fortunes.
For Crypto.com, this situation presents an opportunity of a lifetime. Not only can the company affirm confidence by creating transparency, it can also show that it has been running a clean operation, and preparing for tail-risk, which exists in any market.
As Warren Buffett said, “You never know who’s swimming naked until the tide goes out.”
To be sure, Sam Bankman-Fried was swimming bare-ass naked, and playing fast and loose with a pile of money that wasn’t his. Not only is that unethical, in the USA, it is very, very illegal.
Unfortunately, there are likely to be other operations in the crypto space that have similar issues to the ’empire’ that SBF was running. In this moment, trust in the crypto space is at a low ebb, and it is perfectly understandable why that is the case.
Trust no one, until they prove they can be trusted.
This is What a Bear Market Looks Like
The crypto markets have never seen a bear market like this one, and we aren’t here to tell you it’s over. In fact, it could get a lot worse. There is no telling what other graft is hiding out there, and with these conditions, the dreaded “T” bomb might finally go off.
But it’s not all gloom and doom. There are companies like Crypto.com that see the situation for what it is, and are taking to lead to establish trust in a market that is falling apart.
Not for nothing, but this bear was born in 2021, when everyone thought Bitcoin was going to $100k USD. Now the bad times are here. Who out there understands that the next bull market is born at the bottom of this bear?
If you do – you stand to make a lot of money.
