Cronos Token Faces Decline Amid Centralized Exchange Scrutiny

Cronos Token Hits 22-Month Low

Cronos, the native token of Crypto.com, has plummeted to a 22-month low. This decline comes in the wake of increased scrutiny towards centralized exchanges following the collapse of FTX. The token, represented as CRO/USD, experienced a dramatic 28% drop, halving its value over the past week. Investor concerns are mounting over a potential liquidity crisis similar to FTX's downfall.

Financial Concerns Intensify

Concerns escalated as on-chain data revealed that Crypto.com mistakenly transferred around 82% of its Ethereum reserves, approximately $400 million, to a wallet linked to Gate.io. Although the funds were recovered, this incident contradicted Crypto.com's claims of securely holding user funds in offline cold wallets. Additionally, the exchange faced criticism for having over 20% of its reserves in Shiba Inu, a memecoin.

Impact of FTX Collapse

The collapse of FTX, accused of misappropriating customer funds, has severely impacted sentiment towards centralized exchanges like Crypto.com. Industry voices are increasingly urging traders to withdraw their funds from such platforms. Binance's CEO even advised users to avoid Crypto.com, further undermining confidence.

Market Reactions

Despite reassurances from Crypto.com CEO Kris Marszalek regarding the security of funds, social media influencers have echoed concerns, advising users to exit the platform. The decline of the Cronos token far exceeded losses in the broader crypto market, with Bitcoin and Ethereum also experiencing declines. Tokens of other centralized exchanges, including Binance and OKEx, suffered losses as well.

Broader Crypto Market Turmoil

The broader crypto market has been in turmoil, primarily driven by FTX's bankruptcy and the suspension of customer withdrawals. The focus is now on other entities exposed to FTX, such as lender BlockFi, which recently suspended withdrawals due to its exposure. This ongoing scrutiny and instability continue to shake investor confidence in centralized exchanges.