MapleChange, a small Canada-based crypto exchange, recently reported a hack that resulted in a loss of almost $6 million worth of their client funds, mostly in the form of bitcoin and litecoin. The crypto trading platform has claimed that hackers managed to take advantage of a bug and withdraw all funds from the exchange. Even though the company is “in the process of a thorough investigation”, the refunds of 913 bitcoin seem unlikely.
Due to a bug, some people have managed to withdraw all the funds from our exchange. We are in the process of a thorough investigation for this. We are extremely sorry that it has to come to end like this. Until the investigation is over, we cannot refund anything.
— MapleChange (@MapleChangeEx) October 28, 2018
As the situation developed, the exchange further stated that, “Because we have no more funds to pay anyone back, the exchange has to close down unfortunately. This includes all of our social media.” As of press time, MapleChange has less than 2,000 Twitter followers. Compare it to industry heavyweight Coinbase, which boasts a Twitter following that is more than 1 million strong. The nascent crypto industry is still full of fraudsters and popularity is a pretty reliable way to recognize which platforms you should steer clear of.
Crypto Community Weighs In
Prominent voices within the crypto sphere were soon to voice their doubts about MapleChange, pondering that its owners could have pulled off an exit scam. An exit scam is one of the oldest tricks in the book for crypto scammers. Basically it means gathering a user base, earning their trust and then running away with their money, blaming a hack or some other reason for closure.
Changpeng Zhao, CEO of Binance, warned crypto punters that crypto exchanges that do not provide coin storage in cold wallets should be avoided at all costs. Surprised by the hack, CZ suggested that a ranking system should be introduced, listing exchanges on their wallet storage.
Crypto journalist Joseph Young echoed a similar sentiment, advising to stay away from small unregulated crypto exchanges, who often focus on maximizing profits, instead of protecting their customers.
A small crypto exchange pulled off an exit scam, taking all customer funds.
There is no incentive for using small exchanges. Use established exchanges that are regulated, & transparent.
Small exchanges also focus on maximizing profitability, not security or investor protection pic.twitter.com/iKEO8rDv5z
— Joseph Young (@iamjosephyoung) October 28, 2018
Lose all your users' funds due to a hack or theft (?) and instead of doing the right things, just delete your social media accounts and take your website down?
What about security and transparency as your core values?
— 🎃 Spooky Jackie 🎃 (@find_evil) October 28, 2018
All Signs Point Towards A Scam
Paying homage to the famous Bitfinex‘ed Twitter handle, who is trying to expose shady activities between Tether and Bitfinex, a maplechang‘ed profile is already online, claiming to be “dedicated to find, take down and expose http://maplechange.com.“ The profile has already found a suspect – a service technician Glad Poenaru, who has since deleted his Twitter and LinkedIn accounts.
— maplechang'ed (@Maplechanged) October 28, 2018
Unfortunately for MapleChange customers, the signs do not look good. The exchange website is down and all of the social media pages were shut down, although the Twitter handle seems to be working as of press time. MapleChange was the primary source of trading Conceal Lumeno and Blur Network altcoins, which now face a grim future and are likely to plummet.
Another curious aspect is the trading volume. Even though MapleChange has been operating since May, the trading activity was negligible until last week, when it averaged around $30,000 and reached a peak of $70,000. Such an unexpected trend reversal has people worried that people running the exchange and people who have hacked it are one and the same. We will keep you updated with the latest developments as more details about the incident come to light.
Image Source: “Flickr”
I have been following the crypto markets since mid 2017, just in time to witness the incredible surge of the digital asset industry. Fascinated by the potential of blockchain technology I’ve started to dig deeper and that’s how I ended up meeting the Toshi Times team. I hold a Political Science degree, therefore the crypto regulation development is particularly interesting for me. I’m also heavily involved with music, running my own label, a YouTube channel and working with distribution. People call blockchain the ‘Fourth Industrial Revolution’ and I believe it will change our daily lives in the coming years and we will have the front row seats to witness it.