Crypto com’s CEO says all funds were returned from Gate.io. But onchain clearly shows 35k ETH did not get returned.

Edit: Some comments have pointed out that the 35k ETH was returned to a different CDC wallet. Now it’s just whether CDC and Gate.io colluded on some sort of audit proof of reserves or CDC is actually so incompetent that it sent $500 million worth of user tokens to the wrong address. Either way, this looks extremely bad.

Source: https://twitter.com/jconorgrogan/status/1591516592835559429

Anyone know why Crypto.com would send 320k ETH (82% of their ETH today) to Gate.io on October 21?

And why Gate.io would send back to Crypto.com 285K ETH 5-7 days later?

CDC CEO replied:

All funds were returned. We have single digit USD million balance on Gate as of now.

It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address. We worked with Gate team and the funds were subsequently returned to our cold storage. New process and features were implemented to prevent this from reoccurring.

The problem is, we clearly see that 35k ETH were not returned. I mean, what the hell? Why would they send customer’s ETH deposits to another exchange, still claim 1:1 backing, and not all ETH were sent back?

Also, how could you trust an organization that accidentally sent 320k (~$500 million) of your ETH to the wrong address? Got 285k back. And still claims 1:1 backing?

It baffles my mind how you can accidentally send $500m to someone else. Perhaps it wasn’t an accident?