19-6-2023 (SINGAPORE) Crypto.com, a Singapore-based exchange, has been accused of deploying internal teams to trade crypto assets for profit, according to a Financial Times report citing five unnamed sources with direct knowledge of the matter. The exchange is said to operate proprietary trading and market-making teams that trade both on its own exchange and other venues to make money and boost liquidity. However, Crypto.com representatives have defended this practice, stating that having an internal market maker is not controversial and that the team operates the same as third-party market makers to facilitate tight spreads and efficient markets on the platform.
The company clarified that its app for retail traders generates most of its revenue, and the exchange is the customer’s counterparty for transactions, running the counterparty as a broker model. The Crypto.com trading team hedges these positions on several venues, including the Crypto.com exchange, to ensure that the company is risk-neutral. The spokesperson added that the priority was to continuously improve order book liquidity and lower spreads to create a more efficient market for all participants.
Crypto.com’s native token CRO has experienced a rise in price, with a 5% increase from its local low of $0.051 registered last week. At press time, it was seen exchanging hands around $0.0537. The allegations have raised concerns about the transparency and integrity of crypto exchanges and the need for more regulation to protect investors’ interests and ensure fair market practices.
