Crypto.com CEO Demands Exchange Probe After $20B Liquidations

The cryptocurrency market experienced one of its most severe liquidation events in history, with approximately $20 billion in positions being forcibly closed over a 24-hour period. This staggering figure significantly outpaced liquidation volumes seen during previous market crashes, including the dramatic collapse of FTX that previously represented the benchmark for extreme market stress. The scale of the liquidations prompted immediate concern from industry leaders, with Crypto.com CEO Kris Marszalek taking the unusual step of publicly calling for regulatory intervention.

Marszalek’s call for investigation came through a Saturday post on social media platform X, where he specifically urged regulators to conduct what he termed a thorough review of the fairness of practices employed by exchanges during the market crash. The CEO’s public stance represents a significant development in the ongoing debate about exchange accountability and market integrity during periods of extreme volatility, particularly given that Marszalek leads one of the industry’s major trading platforms himself.

Marszalek’s demand for regulatory scrutiny focused specifically on exchanges that suffered the largest losses during the liquidation event. He raised critical questions about whether trading platforms had deliberately slowed down their systems to a halt, effectively preventing users from executing trades during the most volatile moments. Such system slowdowns could potentially exacerbate liquidation cascades by limiting traders’ ability to manage their positions or add collateral to margin accounts.

The Crypto.com CEO also questioned whether exchanges had properly priced assets during the crisis, asking regulators to investigate if all trades were priced correctly and in line with established market indexes. Mispricing during extreme volatility could disadvantage retail traders while potentially benefiting sophisticated market participants or the exchanges themselves. Additionally, Marszalek raised concerns about whether platforms maintained proper anti-manipulation and compliance controls throughout the market crash, suggesting that some exchanges might have failed in their fundamental market integrity obligations.

Marszalek’s public call for regulatory action comes at a time when cryptocurrency exchanges face increasing scrutiny from regulators worldwide, particularly in the United States. The timing and specificity of his demand suggest that the recent liquidation event may have revealed systemic weaknesses in how major trading platforms handle extreme market conditions. By specifically referencing exchanges with the highest liquidation volumes, Marszalek implicitly questioned whether some platforms’ operational practices contributed to the severity of the market downturn.

The CEO’s focus on fairness of practices, proper pricing alignment with indexes, and maintenance of anti-manipulation controls touches on core regulatory concerns that have plagued the cryptocurrency industry since its inception. His public stance may signal a strategic shift among established exchange operators toward embracing more robust regulatory oversight, particularly as the industry seeks to rebuild trust following the FTX collapse and other high-profile failures. The call for investigation also highlights growing tension between different segments of the cryptocurrency ecosystem, with established operators potentially seeking to distinguish their practices from those of competitors who may employ different risk management approaches during market stress.