As the FTX fallout spreads, smaller cryptocurrencies may have to stop be taken off exchanges to protect consumers, Crypto.com CEO says

• The CEO of Crypto.com said exchanges may have to delist smaller cryptocurrencies to protect users as FTX-related volatility spreads.
• He warned that liquidity has suffered since Sam Bankman-Fried's exchange failed earlier this month.

The collapse of Sam Bankman-Fried's FTX has sent shockwaves through the crypto sector, and more measures must be taken to protect consumers, according to Crypto.com CEO, Kris Marszalek.

One consequence of the fallout has been reducing the liquidity in the broader market, and various exchanges are going to have adjust accordingly.

"Right now after this FTX collapse, the liquidity in the market is poor and it may be so that a number of the smaller coins will have to be delisted in an effort to protect consumers," he told CNBC on Friday.

Factoring into FTX's downfall was its reliance on its own token, FTT, to shore up its balance sheet and that of sister firm Alameda Research. The asset plunged in value and dragged down Bankman-Fried's crypto empire with it. Crypto.com, for its part, has a token too, called cronos.

Marszalek said his company has never utilized cronos in the same risky ways that FTX leveraged FTT.

"[Crypto.com] is a completely different nature of business, versus FTX running a hedge fund and an offshore unregulated derivatives exchange and losing $10 billion in the process," he said.

He also noted that the exchange is well capitalized.

"We have a very strong balance sheet, zero debt and zero leverage in the business, and we are cash flow positive," he maintained. "The business generated over a billion dollars last year, and almost generated a billion dollars in revenue this year. We feel quite good about where we are as a company and our operations."

Marszalek cautioned that the broader sector could face trouble as confidence erodes in the wake of the lastest crypto chaos.

"Players have to collectively work on regulators around the world to make sure consumers are protected, and that's what we've been doing for the last seven days since this shocking news broke," he said.