Crypto.com noted that nothing proves wrongdoing in the ventures previously led by Marszalek, who believes more FUD targets his cryptocurrency exchange. The Polish entrepreneur said his experience with Starline was complicated but allowed him to learn how to solve problems better.
Although nothing proves that Crypto.com has done something wrong, Kris Marszalek, its CEO, has a story full of red flags.
After one of his companies collapsed in 2009, a judge called his testimony unreliable. Additionally, his business activities before he founded Crypto.com involved a multi-million dollar settlement of defective product claims and corporate bankruptcy.
However, Crypto.com pointed out that there is no evidence of wrongdoing in the ventures previously led by Marszalek. At the request of CNBC, he recently said that more fear, uncertainty, and doubt (FUD) was targeting Cryto.com.
Marszalek explained that the FUD targeting the cryptocurrency exchange was about a trading failure in his early career.
The Polish entrepreneur described his past bankruptcy and the closure of his e-commerce business as learning experiences. Besides, he said that startups are complex and may fail once and again.
He expressed he was proud of his battle scars and had nothing to hide. He highlighted that his early failures made him a trader that could grow a business and manage risk.
The Company Starline Files Bankruptcy Due to a Lack of Funds
In 2004, Marszalek founded Starline, a company that manufactured hardware products like hard drives and USB drives. However, an investigation by CNBC indicates that there is much more history behind that firm.
Between 2008 and 2009, Marszalek and his partner reportedly received almost USD 3 million in unsubstantiated payments from Starline.
Marszalek received over USD 1 million, which the court called disputed payments, while his partner took around USD 1.9 million.
Judge Anthony Chan said in a court file that there seemed to be a concerted effort to extract the cash from Starline.
In late 2009, Kris Marszalek and the company Starline had to file for bankruptcy protection. According to court records, that was due to a lack of funds to pay the credit lines.
However, Marszalek said the experience with Starline was a complicated but fruitful learning opportunity. That allowed him to found Monaco, a new e-commerce, which he later renamed Crypto.com. In 2012, he could repay outstanding debt with interest, leading to canceling the abovementioned bankruptcy petition.
The Crypto Market Crash Forces Crypto.com to Lay Off Many Employees
According to the Financial Times, the revenues of the company Crypto.com exceeded USD 1.2 billion in 2021. That year, the price of cryptocurrencies skyrocketed, with Bitcoin rising to more than USD 68,000 in November.
However, the crypto market crash in 2022 has been catastrophic for leading players, going beyond the collapse of the FTX exchange. For example, the shares of Coinbase have fallen by 84%, which forced the company to lay off 18% of its staff. As for Crypto.com, various reports indicate that it dismissed hundreds of employees over the last few months.
Meanwhile, Bitcoin (BTC) is trading at around USD 17,184 and has accumulated a 0.2% gain over the last 24 hours. While its trading volume is above USD 14.72 billion, its market capitalization is about USD 330.47 billion, according to CoinGecko.
By Alexander Salazar
