The Curious Case of’s (CRO) Exposure to FTX and the Impeccable Timing of Its “Accidental” Ethereum Transfers to

Rohail Saleem

This is not investment advice. The author has no position in any of the stocks mentioned. has a disclosure and ethics policy. has entered a full-fledged combat mode to counter the supposed “FUD” narrative that has spread like wildfire across the global financial sphere, with the embattled company’s CEO Kris Marszalek going so far as to hold a dedicated AMA session on YouTube to try to calm the fraying nerves of its clients. However, judging by the persistently negative funding rates related to’s Cronos (CRO) coin, investors and speculators alike appear convinced that the firm will be the next to go under as the carnage from the FTX saga now begins to demand its pound of flesh from other over-leveraged and under-collateralized entities.

As a refresher, is a Singapore-based cryptocurrency exchange. In early summer, the exchange had around 50 million customers. The Cronos (CRO) coin powers’s native Cronos blockchain – a decentralized, multi-layered blockchain where each node runs in a Trusted Execution Environment (TEE) to maximize security and privacy. The Cronos blockchain also forms the backbone of Pay, a mobile-based payments app. Users can stake some of their CRO coins on the Cronos blockchain in order to act as validators and earn fees from processing transactions. The CRO coin also unlocks cashbacks on the Pay app.

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Let’s now discuss why clients are afraid that the exchange might go under. As a manifestation of this evolving negative sentiment, just look at CRO’s soaring transfers. This is likely the result of clients fleeing the exchange in anticipation of an FTX-style default.


Moreover, the funding rates of the CRO coin perpetual futures contracts remain deeply negative across multiple exchanges. For the uninitiated, funding rates are used to align a perpetual contract’s price with the underlying spot price of a cryptocurrency. If the buying pressure escalates and the price of a perpetual contract rises above a particular cryptocurrency’s spot price, funding rates become positive and reward those taking a short position in order to create re-alignment. Similarly, if the selling pressure escalates, funding rates become negative, thereby penalizing the shorts while rewarding those taking a long position on the contract. As is clear from the snippet above, speculators remain deeply short on’s CRO coin, hence the persistently negative funding rate on the coin’s perpetual contracts.

But the question emerges, why is there such a panic? First, as is explained in the Twitter thread above, over the last year, channeled funds of around $1 billion into FTX, which as most of our readers would know by now, has declared bankruptcy. Of these, on-chain data suggests that has only been able to recover a little over $100 million, leaving an $855 million potential financial hole for the Singaporean exchange.

Of course,’s CEO has vehemently protested these assertions, claiming that the exchange’s exposure to FTX is “under $10 million.” However, judging by the negative funding rates on the CRO coin perpetual futures contracts, investors remain unconvinced. has also hosted an AMA session on YouTube to address these concerns:

As if a potential multi-million-dollar balance sheet hole was not scary enough, allegations continue to pop up that troubled exchanges have been stealthily helping others beef up their respective “proof of reserves.” We touched on this aspect in our previous post as well.

Well, in the case of, the coincidence is very striking. Consider the fact that the exchange claims to have “accidentally” transferred 320,000 Ether coins (over $400 million at today’s price) to in late October. Interestingly, this is the exact window when published its proof of reserves. Can this be a mere happenstance? Sure. But when such huge sums are involved, the likelihood of an innocent mistake decreases drastically, especially in light of the plethora of internal controls that are deployed to prevent just such a calamitous “mistake.”

Meanwhile, the juggernaut continues!

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