There's an eery similarity between the collapse of FTX, and Lance Armstrong's doping scandal.

The golden child of the space was revealed as a fraud, and now no one knows who to trust.

After it was discovered that FTX were using customer funds as their own personal piggy bank, there was a big push for other crypto companies to prove they haven't been doing the same.

But this isn't anything new.

Many major centralized crypto exchanges regularly show 'proof of reserves,' to reassure their customers that their money is safe, and avoid any panic-triggered-mass-withdrawals.

...and here's where today's (potential) scandal comes in.

With this heightened scrutiny, sleuths in the crypto space have been scouring back over the transaction histories of many centralized exchanges.

And, ah - they just found something.

On October 21st, Crypto.com 'accidentally' transferred $400M worth of Ethereum (ETH) to a rival exchange, Gate.io.

...just one week before Gate.io were due to show their proof of reserves.

The day after they'd released their proofs? Gate.io kindly returned the ETH.

(How convenient).

So, if this was an attempt to help Gate.io to help fudge their numbers:

What made them think they could get away with it?

Well, the FTX news hadn't broken yet - so they probably thought they could do it quietly.

And if they couldn't do it quietly, there was most likely an assumption that they could blame it on internal mismanagement (which they have).

But with the current levels of scrutiny and distrust within the crypto world, that ain't gonna happen.

So, where to from here?

Are we about to see Crypto.com collapse? No idea.

What we do know is this:

The safest bet right now is to move all of your crypto onto a self custodial hardware wallet like Ledger or Trezor.

Or, if you're in a pinch and can't get one shipped in time - a self custodial software wallet like TrustWallet can fill the gap while you wait.

If these exchanges have been behaving properly, like they claim, these withdrawals should be manageable.

If not, you don't want to be left holding the proverbial 'hot potato of spiraling debt.'