A series of on-chain transactions discovered over the weekend sparked rumors that Crypto.com (disclosure: a sponsor of Unchained) could be the next major exchange at the risk of insolvency.

After the collapse of FTX, market participants speculated that some other crypto exchanges could be secretly insolvent – ironically, a theory that FTX CEO Sam Bankman-Fried shared with Forbes earlier this year. 

Some members of the crypto community said they had good reason to believe that Crypto.com had “huge exposure to FTX” and was likely to go under. Crypto.com CEO Kris Marszalek called these allegations “absolutely false” and directed users to a Nov.9 tweet, where he claims that Crypto.com’s exposure to FTX was an “immaterial” amount under $10 million.

“That’s very little compared to our global revenues surpassing US$1 billion for two consecutive years,” said Kris.

On-chain data which later came to light revealed that Crypto.com had transferred 320,000 ETH, worth around $415 million at the time, to Gate.io on Oct. 24. The funds transferred represent around 85% of Crypto.com’s reserves and drew speculation about the motives behind the transfer.

“It was supposed to be a move to a new cold storage address, but was sent to a whitelisted external exchange address,” tweeted Crypto.com CEO Kris on Saturday, referring to Gate.io’s address as the whitelisted 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,” he added.

The timing of the accidental transfer raised eyebrows, with some users questioning whether these funds were reflected in Gate.io’s Proof of Reserves report that was published Oct. 28.

In a follow up tweet on Sunday, Kris addressed the ongoing speculation and said that the entirety of ETH sent by Crypto.com had been returned to its cold storage wallet by Gate.io.

He also linked users to an announcement from Gate.io that clarified that the snapshot of funds published in its Proof of Reserves audit was taken on Oct. 19 and did not include Crypto.com’s ETH transfer. On-chain data confirms that Crypto.com did indeed receive the funds that were accidentally transferred to the Gate.io wallet, albeit through a series of transactions sent to different wallets. 

Still, the nature of such a large transfer being accidentally made out to a different wallet address raised concerns for Crypto.com users. One industry watcher cautioned users about holding their assets on the platform on the off-chance it was actually insolvent.

“To be clear, I don’t claim to have any evidence of malicious intent or insolvency But given their historical operational failures—misplacing $400M of customer’s ETH—I don’t exactly have high confidence,” tweeted ChainLinkGod.eth. 

The nature of Crypto.com’s own reserves were also the subject of scrutiny after on-chain analysis revealed that 40% of its assets were in low-liquidity tokens. Of the exchange’s $2.68 billion in assets, $531 million was held in Shiba Inu and $80 million was in its own exchange token CRO, which declined 24% in the last day. Data compiled by Lookonchain showed that the exchange withdrew $210 million USDT from Binance and $50 million USDC from Circle before announcing its reserves. 

Some users also questioned why a majority of cold storage funds sent to Crypto.com came from other exchanges.