Canadian exchange bitcoin “hack” leaves crypto largely unmoved

MapleChange

update: 29 October 11:50 UTC+1 – BTC has fallen 1% since time of writing

We are used to seeing exchange security issues hitting the bitcoin price, but there has been no such reaction in response to the apparent hack at Canada’s  MapleChange exchange.

Bitcoin is unchanged at $6,465 and top crypto are all stable. So what happened at MapleChange?

First, the exchange informed its customers via Twitter that 913 bitcoin worth approximately $5.5 million at current prices had been stolen, blaming a software bug for the problem.

The company says it cannot refund any BTC or Litecoin (LTC) but other coins can be refunded. MapleChange has set up a Discord channel for customers to claim their refunds. The exchange carried an upgrade of its server on 27 October and perhaps a bug was introduced during this maintenance outage.

But as can be seen from the replies to the Tweet above, that doesn’t seem to be working out very well.

The exchange’s website is no longer accessible but claims that all social media accounts had been deleted is not true as far as Twitter is concerned, although there has been no post for 10 hours, at time of writing.

MapleChange says it is sending out wallets to developers, mentioning LMO (Lucky Money) and CCX (there are at least four tokens that use that ticker) Ethereum tokens. CMO and LMX were only listed on the exchange in early October. Neither tokens are covered by coinmarketcap. Here’s exactly what MapleChange says:

“We are sending all of the coin developers the wallets containing the coins we have left. So far, LMO and CCX have been handed over the funds.”

That is strange.

Elaborate exit strategy?

If the exchange has the tokens then why not send them direct to the customers from the wallets held by the exchange. It is not clear why the developers of specific coins would need to be sent the tokens.

There are claims that the hack was an inside job, but as yet there is no evidence for this. More information will likely emerge today as to the whereabout of the stolen BTC and LTC.

If it is an elaborate exit strategy then it is hard to see how the owners will not be going to jail because the laws of fraud still apply even if this is crypto.

MapleChange is based in Edmonton in the province of Alberta.

It is a very bad idea to keep crypto funds on an exchange, other than the portion being actively traded, especially a small exchange such as MapleChange.

Most of the exchange’s customers are thought to be Canadian and the exchange branding certainly positions it to target its home market.

Generally speaking, the smaller the exchange the less likely it will have the financial and technical resources to devote to security and other business processes.

About the Author

Gary McFarlane
Gary has been writing about cryptocurrencies since 2013 and currently works as the cryptocurrency analyst at interactive investor, the UK's second-largest online investment platform. Gary contributes for Coin Intelligence News in a personal capacity and none of his commentary should be considered investment advice. Gary is the winner of the ADVFN International Financial Awards 2018 Cryptocurrency Writer of the Year. Contact Gary on twitter at: @gary_mcfarlane

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