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MapleChange’s Exit Scam is Terrible, But It’s Nothing New
Yesterday, MapleChange, a small Canadian-based cryptocurrency exchange, tweeted that it was “hacked” but it seems that all signs are pointing to an apparent exit scam instead.
Allegedly, hackers exploited a bug on the platform and were able to withdraw user funds amounting to almost $6 million. Though MapleChange stated it was performing an investigation, it made sure to reiterate that it could not refund any user funds and that they are “extremely sorry that it has to come to end like this.”
However, despite MapleChange’s statement, the crypto community won’t buy it.
Anddddd it’s gone
Now, all signs are pointing to an exit scam – a scheme in which MapleChange gained the trust of users, gathered enough user funds, and then claimed it all ‘disappeared.’
While this is an unfortunate event for all of the users who held funds on MapleChange’s platform, this is nothing new to the cryptocurrency industry.
Actually, research released by the Federal Trade Commission (FTC) earlier this year forecasted that investors would lose an estimated $3 billion to crypto scams by the end of 2018.
For reference, the U.S. securities market is estimated to have $10-40 billion worth of fraud each year, but it is a much lower fraud rate since its market capitalization is over 145 times larger than the crypto market.
Stay safe out there
While the crypto industry is far from the wild west it use to be, it still has its issues, especially with unregulated exchanges.
Joseph Young, a cryptocurrency journalist for multiple publications, warned the community of small exchanges:
“There is no incentive for using small exchanges. Use established exchanges that are regulated, and transparent. Small exchanges also focus on maximizing profitability, not security or investor protection.”Echoing that, Binance CEO Changpeng Zhao proposed in a tweet that someone should rank crypto exchanges by wallet storage and users should avoid any exchange that doesn’t utilize cold storage to protect user funds.
However, if MapleChange was truly an exit scam, only due diligence by the users could have helped avoid lost funds.
Cryptocurrencies Get the Stamp of Approval in Ukraine
The Economic Development and Trade Ministry of Ukraine recently established a “state policy” declaring the legality of all crypto-related activities. The Ministry states its purpose is to “create understandable conditions for conducting activities in the field of virtual assets and virtual currencies.”
To create clarity, the legislation will establish legal definitions for terms like: “virtual currency”, “cryptocurrency”, “virtual assets”, “ICO”, “mining”, “smart contracts”, and “tokens.”
The legalization will take place in two separate stages and the entire process is expected to be completed by 2021.
Ukraine’s history with crypto
This legislation was in the works for awhile. In May, a Ukrainian legislator shared a picture on his Facebook page of a draft of this legislation.
Just last month, the government proposed a plan for crypto taxation. If signed into law, individuals’ crypto holdings would be taxed at a rate of 5% and businesses would have a rate of 18%.
While the legislators are doing their role, the National Bank of Ukraine (NBU) is researching the implementation of a state digital currency pegged to the local fiat currency.
Refreshing take on regulation
Governments all around the globe are playing catch up. Crypto took off faster than any of them imagined. Now, they are frantically trying to decide how they want to regulate this new asset class.
Some governments are taking a more strict stance and some are more lax. However, it is most frustrating to the crypto community when governments are opaque in their stance.
Ukraine is acting in a decisive, clear manner. Other governments should take notice to how Ukraine is handling this legislation and learn from it.
Coinbase Trims Support Staff
Expanding, now downsizing?
According to a report from Yahoo, Coinbase has cut a rumored fifteen employees from its customer support, compliance, and fraud departments. Coinbase confirmed the lay offs, but the number remains unconfirmed.
The firings seem to have shaken up the culture at Coinbase. One employee anonymously told Yahoo, “People here are pretty upset about it, and so far senior leadership is handling communications poorly.”
This may come as a surprise. Coinbase has constantly been in the news for expanding its new operations. Coinbase has been on a spree so far this year, opening new offices, hiring new executives, and acquiring new companies.
Nonetheless, fifteen employees is relatively insignificant of a downsize for a company of more than 550 employees.
What going on at Coinbase?
This sudden downsize after a prolongued period of expansion leads one to wonder what is happening at Coinbase.
You could speculate that the bear market is finally getting to the company. This is probably not the reason for the lay offs. Coinbase is very well funded and extremely profitable. It doesn’t make sense that they are in a dire need to save cash.
The real reason seems to be that Coinbase is rescinding its former policy of allowing employees to work remotely. It is rumored that all of the employees that were let go, were remote employees. Coinbase most likely had a change of heart and wanted all of its employees under its roof, so it decided to cut ties with its remote employees.
Coincheck Gets Slammed in Q3 Following Hack
When a crypto exchange gets hacked, the exchange may be able to remain solvent and refund users, but the trust is broken – one of the most important aspects of the business.
For Coincheck, that loss of trust came to the tune of a massive hack in January when over $532 million worth of NEM was transferred from its wallets.
Now, after being acquired by Monex Group Inc. in April, the hack continues to weigh heavy according to its quarterly report:
While Monex Group Inc. is trying to reorganize Coincheck following the breach, the 66% decline in revenue from the second quarter to the third quarter is a beast of its own to deal with.
One thing is clear: if Coincheck wishes to compete again, it will have to drastically improve its reputation with the crypto community.