Quite a lot of crypto investors have lost a substantial amount of money through exchange attacks in 2018 but that may be out of vogue now. As bad as those incidences were, only few can compare to the case of an exchange closing down completely with all users funds gone forever.
This is the case with MapleChange, a small crypto exchange that probably hasn’t been around for long. The exchange wrote on its Twitter page today that it had run out of funds and cannot afford to pay any user so it had to close down “unfortunately”. It further added that all its social media accounts have also been closed due to the closing of the exchange.
Joseph Young, a cryptocurrency author, investor and analyst wrote a post concerning the closing of the exchange on his Twitter page. In his opinion, investors should only work with exchanges that have been around for long with a proven track record of efficiency and credibility. The post reads:
“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,” he added.
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
There have been reports of Bitcoin loss by investors through hackers attacking exchanges or individual accounts. The most recent was a Binance user’s account being hacked for the second time.
The question many would ask is how did the exchange get approved and allowed to operate in the first place? Could it be due to the non-regulated crypto space that such an exchange can just shut down on a moments notice?
According to reports, the transaction statistics of the exchange shows a heightened transaction volume last week which leads many to believe that this is clearly an exit scam.
The closing of social media accounts is another red flag that strongly suggests foul play in the matter. Another suspicious thing is that the exchange hasn’t done anything to salvage the situation other than to shut down.
Crypto exchanges need to be monitored more closely to avoid the recurrence of this kind of incidents as the industry cannot continue to thrive if investors cannot be certain about the safety of their investments.