Gate.Io, Crypto.Com and Houbi Under Criticism for Unclear Transactions in Assets Snapshots

Gate.Io, Crypto.Com and Houbi Under Criticism for Unclear Transactions in Assets Snapshots

Facing the growing mistrust among crypto investors after the FTX collapse, crypto exchanges unanimously agreed to disclose proof of reserve with the public as a way to demonstrate legitimacy However, certain anomalies discovered during on-chain investigations point to fraud and market manipulation.

Investigators discovered that 320,000 Ether was sent to Gate.io on October 21, 2022, just two days after Crypto.com made the details of their cold storage information available. The Twitter community is on fire, discussing hidden motives behind asset transfers between Crypto.com and Gate.io. The CEO of Crypto.com, Kris Marszalek, denied any wrongdoing, saying the money was transferred mistakenly and finally returned to the original storage.

Gate.io confirmed the statement and reaffirmed in a tweet that the ETH transferred from Crypto.com was not included in the proof of reserves audit. The company also disclosed the transaction ID, which proved that all money had been sent back to Crypto.com.

Many Twitter users claim that Crypto.com and Gate.io are borrowing money from one another to support their proof of reserves, in spite of the exchanges' claims.

In addition, Huobi is suspected by the cryptocurrency community of trying a similar manipulation. Soon after the Huobi exchange released its asset snapshot, a wallet address connected to the Huobi exchange was seen moving 10,000 ETH to Binance and OKX deposit wallets.

Huobi has not yet responded publicly to the allegations made by the cryptocurrency community, however, Gate.io founder Lin Han shared their side of the story.  Han asserted that the snapshot was captured on October 19, two days before the accidental transfer of 320,000 ETH by Crypto.com.

The possibility of multiple crypto exchanges working together to manipulate investor funds has forced the community to keep their guard up until an official statement. Huobi has not yet responded for comment.

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