Hack or Exit Scam? Small Canadian Crypto Exchange Goes Semi-Dark
After reporting itself as being hacked, small Canadian cryptocurrency exchange Maple Change scrubbed much of its online presence, including its website and most of its social media accounts. That behavior has led to calls of an exit scam and has highlighted the risks associated with using smaller exchanges. Maple Change has maintained they aren’t disappearing and will refund what they can.
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Maple Change Scrubs Most of Its Online Presence
On October 28th, small Canadian cryptocurrency exchange Maple Change claimed a catastrophic hack had cleaned out “all [its] funds,” though its team later said only its bitcoin and litecoin wallets had been cleaned out as a result of a “bug.”
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
In the aftermath, the exchange deleted its BitcoinTalk, Discord, and Telegram presences and temporarily deactivated its Twitter before later reactivating its handle.
Maple Change initially said it scrubbed the accounts because it couldn’t afford to refund its traders in full. That suspicious behavior has led to general calls of an exit scam throughout the cryptoverse.
As the situation progressed, Maple Change said it wasn’t disappearing altogether, contradicting its earlier assertion that it was shuttering “all our social media.”
The exchange also later said it could refund some users, asking them to reach out via private message. It marked another contradiction of an initial assertion that they had “no more funds to pay anyone back.”
It remains to be seen how many traders, if any, will be made whole from the episode. Bitsonline will continue to track the situation as it develops.
If You Don’t Control Your Keys …
One of the most popular refrains in the cryptoeconomy is as follows: If you don’t control your private keys, you don’t control your cryptocurrency.
With that said, if past exchange meltdowns are any indication, most of the traders affected by the Maple Change implosion will likely never be made whole.
Indeed, the smaller the exchange, the higher the likelihood that 1) it doesn’t have the infrastructure in place to prevent or cover devastating hacks, or 2) it doesn’t have the ethical infrastructure in place to prevent exit scams.
It’s not clear yet what exactly happened behind the scenes at Maple Change, but with the sketchiness at hand, some pundits in the space, like Canadian bitcoiner Francis Pouliot, have put their bets on the occurrence of an exit scam.
I'm going to go ahead and call it early without proof: exit scam!
It has all the tell-tale signs of a pathetic attempt to stage a "hack" and run away with user funds. It's so easy to hide malice behind incompetence.
— Francis Pouliot (@francispouliot_) October 28, 2018
“Not your keys, not your bitcoin,” remarked Matt Odell, co-host of the “Rabbit Hole Recap” segment from the popular Tales from the Crypt podcast.
Looks like they deleted their account. I figured they would since they also deleted their discord and some other social media accounts. My guess is this was an inside job/exit scam connected to the recent site upgrade.
Anyway, I took a screenshot before they deleted. pic.twitter.com/RLV1d8ik5i
— Matt Odell (@matt_odell) October 28, 2018
And cryptocurrency pioneer Nick Szabo also commented on the episode, referring to his routinely-espoused dictate that “Trusted third parties are security holes.”
— Nick Szabo (@NickSzabo4) October 28, 2018
It will be good news if Maple Change manages to refund most of the traders that have been affected by its alleged hack. However, many in the space would say don’t hold your breath.
What’s your take? Is it a bad idea in general to use small cryptocurrency exchanges? Let us know what you think in the comments section below.
Images via Pixabay, Twitter