MapleChange, a relatively less known Canadian cryptocurrency exchange, claims to have been hacked for 813 Bitcoin on Sunday morning, although this has not been confirmed.
Headquartered in Edmonton, Alberta, MapleChange’s twitter bio portrays their vision statement: “A high-quality, responsive and swift trading platform based in Canada!”
They wrote on Twitter explaining that “due to a bug,” an unnamed group of individuals managed to withdraw funds. It further elaborated that it is conducting a “thorough investigation” and “will be unable to make refunds”. A lot of users and critics are skeptical about the legitimacy of this hack, some even going so far as calling it an exit scam by a supposedly reputed Canadian exchange with a daily volume of ~6 Million.
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
Social Media Outcry
As mentioned on their website, one of their values is to uphold customer security.
“One of our primary concerns is security for our customers. We place a huge portion of our time and funding towards ensuring security is not compromised.”, it mentions.
Soon after releasing news of the hack, MapleChange shut down their social media channels within Telegram and Discord. This led to several Twitter users accusing them of being the ‘hackers’, misrepresenting information of the hack, and planning an exit scam. Soon after, this is the response given by MapleChange Twitter admin justifying the reason for closing their social media accounts.
“Because we have no more funds to pay anyone back, the exchange has to close down, unfortunately. This includes all of our social media.”
Exchange 2.0 Release
MapleChange had just released a sleek, updated 2.0.0 version of their exchange a day before the hack. This hack came as a surprise to several of their users especially considering this new UI and UX update that happened in the foreground.
Such a major hack soon after the update also led to several questions such as why MapleChange didn’t have any insurance for such emergency losses to refund customers. They kept a firm stance that they would not refund any customers for their Bitcoin (BTC) losses.
Caution against smaller, unregulated exchanges
This event sheds yet another important light on the fact that investors and public should exercise heavy caution when dealing with smaller, unregulated exchanges like MapleChange. Moreover, using decentralized exchanges or hardware wallets are recommended to avoid or minimize the impact of such a situation. Several prominent crypto enthusiasts explained their concern as well against such smaller cryptocurrency exchanges.
BitLord, a popular Australian cryptocurrency trader went on a 6 minute rant against MapleChange explaining this very concern. He elaborated that small crypto exchanges should be dealt with skepticism and mentioned that this was one of the reasons he has been able to stay active in the crypto industry for such a long period of time without significant losses.
Another fellow crypto journalist, Joseph Young, outlashed and explained that MapleChange had just pulled off an ‘exit scam’. He said that such smaller exchanges solely focused on maximizing their profitability with no regard for their customers and the treatment or management of their funds.
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
Finally, Changpeng Zhao, the renowned CEO of Binance, explained that any crypto investor should not store their cryptocurrencies in exchanges that do not give them complete access to their private keys and cold wallets. This portrays how the current lack of efficient storage solutions is representative of an exchange’s capacity to achieve its intended goals.
Even though MapleChange wasn’t a very big exchange in terms of total trading volume, this is an extremely rare situation when an entire exchange shuts down its operations due to a supposed ‘hack’ in their system. Only time will show how their management responds to the public furor created around this supposed exchange hack.
As always, CryptoTicker advises all cryptocurrency investors and enthusiasts to maintain caution while dealing with the buying and selling of cryptocurrencies and crypto assets across exchanges. Always ensure that you have access to your cold wallets and private keys.