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Cryptocurrency Exchange in Canada Hacked or an Exit Scam?

cryptocurrency exchange

Hacking incidents are quite common in today’s crypto market. Could you imagine losing $1.1 billion this year alone because of hacking incidents? In fact, it is a problem that regulators are trying to address. Cryptocurrency exchanges in Japan have been hacked over the years. And now, the regulators decided to impose stricter guidelines before a crypto exchange can conduct business in Japan.

One of the worst hacking incidents is that of Coincheck when around $500 million worth of cryptocurrencies were stolen by hackers.

The crypto exchange MapleChange announced that they lost all funds. MapleChange may not be a dominant player in the market but it has lost a significant amount of cryptocurrencies. According to reports, it lost 913 Bitcoin.

Withdrawal of Funds

The company explained that the attacker was able to withdraw the funds form their system using a bug. The crypto exchange was challenged on Twitter by one user. It was then that they decided to shut down their social media accounts. According to one of the tweets, until the investigations have been finished, all of the funds that have been lost will not be returned to users.

The tweet said:  “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”.

Exit Scam?

Could it be an exit scam? Many are already looking at this possibility, Even Changpeng Zhao of Binance, which is the most popular crypto exchange in the world took notice and said: “Wow, someone should rank exchanges by wallet storage”.

The equivalent of the 913 bitcoins stolen is at $5.9 million. Shutting down everything after a theft is an irresponsible behavior on the part of the exchange. And since the crypto market is already looking for answers, MapleChange’s Twitter account became active again all of a sudden saying that: “We have not disappeared guys. We simply turned off our accounts temporarily to think this solution through. We cannot refund everyone all their funds, but we will be opening wallets to whatever we have left so people can (hopefully) withdraw their funds”.

Scams aren’t really new in today’s crypto world. In fact, there are a lot of scams that involved ICOs. Exit scams are also something that has been quite rampant. And in this kind of scenario, it is important to have a regulator that will be able to protect the investors. Most likely, without the proper regulation, many could simply get away with this type of scheme.

If you will look at Twitter, many think that it isn’t exactly a hack that happened. There was even a Twitter user who said that “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?”.

This type of incident is bad for the crypto market. In fact, bigger hacking incidents could even drop the price of Bitcoin since it can affect the confidence of investors. Now, more than ever, it shows the importance of proper regulations in order to be able to protect investors.

John Jayme

John is a crypto investor, enthusiast and copywriter. He is in charge of daily news and other emerging trends in blockchain technology.