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I also think he's probably not dead, but I don't think he absconded with the holdings. I think it's a slightly different situation: there aren't any significant

I also think he's probably not dead, but I don't think he absconded with the holdings. I think it's a slightly different situation: there aren't any significant holdings left, and haven't been for a while. I think he already spent/lost almost everything they had, expecting that crypto would go up and everything would work out. Then it went down and stayed down, his plans blew up, and he knew he was screwed and could never pay the users back. That is, I don't think it's an exit scam, I think it's a desperate attempt to hide a massive failure in running the exchange. The "we can't access the cold wallets any more" was intended to be a believable excuse that would explain why they couldn't return people's money.

pjc50 8y ago
The eternal bitcoin question: malice or incompetence?
- sxafo 8y ago
  Probably a some mixture of both. Or at least reckless disregard.
- newsbinator 8y ago
  Never attribute to bitcoin that which is adequately explained by stupidity.
- spookthesunset 8y ago
  Considering the whole ecosystem is a rich tapestry of scammers scamming scammers.... the answer to your question is "yes".
- msh 8y ago
  Well && is also possible instead of ||
  - pjc50 8y ago
    Ah, of course - what if he stole the cryptocurrency then accidentally died while being the sole holder of the passwords? Oh well, unrecoverability is a feature, as people keep reminding us.
    - SZJX 8y ago
      Or maybe he stole the funds dreaming to make more, but only to get crushed as the market crashed, and now went into the hiding, as an earlier poster suggested. It's also possible that he just absconded with all the money though.
gumby 8y ago
My belief is in line with the gp post and not yours for the reason that it's hard to hide $250M of spending (unless it was all in financial instruments that went to nil, which is less likely than buying cars and the like). In any case these schemes are hard enough to pull off that eventually I imagine we'll find out. Though $250M is right in the valley of interest to the cops: small scale (<$1M and <$10M) and very large scale (Madeoff, Stanford) both of which get press.
- eternalny1 8y ago
  If they took the customer funds and invested them straight into crypto when it was peaking, thinking it was going to continue up, they would have lost a LOT of that money. On top of that, the Canadian government locked up a portion of their funds right around the time they started to experience withdrawal problems. Makes sense to me.
  - honopu 8y ago
    He would be down about 90%, unless he went to bitmex and lost it all on terrible leveraged trades. He prolly swapped to Monero or something like that
  - usrusr 8y ago
    > and invested them straight into crypto when it was peaking ...then compound those losses by taking on a series of ever more risky bets in an attempt to win it back. At least that's the usual way of how gambling ruins people.
- Mvandenbergh 8y ago
  I think it's very likely for financial instruments to go to nil if you're using leverage or investing in very speculative crypto.
- jwalton 8y ago
  It's worth $250M now, but if he's been stealing from his customers, it could have been worth a lot less than that when he stole it. He might have even "borrowed" some to cover some minor emergency, then bought back in when crypto was high, and now he's massively in the hole.
ucha 8y ago
Brian Armstrong thinks the same thing: https://twitter.com/brian_armstrong/status/1098656491609849856 https://twitter.com/brian_armstrong/status/10986564916098498...
YeGoblynQueenne 8y ago
Isn't the simplest explanation that agrees with the evidence that he just died?
- gotocake 8y ago
  I’m not sure that Occam’s Razor applies when the simplest explanation doesn’t fit all of the facts. It may still turn out to be true that he’s just dead, but that still leaves the question of the empty wallets, convenient timing, where he died, and his remains. If we accept his death, we need to make some more assumptions about the disposition of the coins, but if he faked his death we need no further assumptions. In addition faking your own death in this context isn’t exactly unheard of, and he couldn’t have picked a bigger haystack to get lost in.
- deleted 8y ago
  [deleted]
jen729w 8y ago
Wouldn't the public transaction records on the cold wallet addresses confirm or deny this (plausible) hypothesis?
xorcist 8y ago
This is pretty much what the article tells us, in more general terms: "a sixth appears to have been used to receive Bitcoin from another cryptocurrency exchange" Customers doesn't directly transfer funds to cold wallets (if they were they would be much easier to identify) and there's very little other reason to intermingle customer funds with proceeds from trading on other exchanges.

pjc50 8y ago

The eternal bitcoin question: malice or incompetence?

sxafo 8y ago
Probably a some mixture of both. Or at least reckless disregard.
newsbinator 8y ago
Never attribute to bitcoin that which is adequately explained by stupidity.
spookthesunset 8y ago
Considering the whole ecosystem is a rich tapestry of scammers scamming scammers.... the answer to your question is "yes".
msh 8y ago
Well && is also possible instead of ||
- pjc50 8y ago
  Ah, of course - what if he stole the cryptocurrency then accidentally died while being the sole holder of the passwords? Oh well, unrecoverability is a feature, as people keep reminding us.
  - SZJX 8y ago
    Or maybe he stole the funds dreaming to make more, but only to get crushed as the market crashed, and now went into the hiding, as an earlier poster suggested. It's also possible that he just absconded with all the money though.

gumby 8y ago

My belief is in line with the gp post and not yours for the reason that it's hard to hide $250M of spending (unless it was all in financial instruments that went to nil, which is less likely than buying cars and the like). In any case these schemes are hard enough to pull off that eventually I imagine we'll find out. Though $250M is right in the valley of interest to the cops: small scale (<$1M and <$10M) and very large scale (Madeoff, Stanford) both of which get press.

eternalny1 8y ago
If they took the customer funds and invested them straight into crypto when it was peaking, thinking it was going to continue up, they would have lost a LOT of that money. On top of that, the Canadian government locked up a portion of their funds right around the time they started to experience withdrawal problems. Makes sense to me.
- honopu 8y ago
  He would be down about 90%, unless he went to bitmex and lost it all on terrible leveraged trades. He prolly swapped to Monero or something like that
- usrusr 8y ago
  > and invested them straight into crypto when it was peaking ...then compound those losses by taking on a series of ever more risky bets in an attempt to win it back. At least that's the usual way of how gambling ruins people.
Mvandenbergh 8y ago
I think it's very likely for financial instruments to go to nil if you're using leverage or investing in very speculative crypto.
jwalton 8y ago
It's worth $250M now, but if he's been stealing from his customers, it could have been worth a lot less than that when he stole it. He might have even "borrowed" some to cover some minor emergency, then bought back in when crypto was high, and now he's massively in the hole.

ucha 8y ago

Brian Armstrong thinks the same thing: https://twitter.com/brian_armstrong/status/1098656491609849856 https://twitter.com/brian_armstrong/status/10986564916098498...

YeGoblynQueenne 8y ago

Isn't the simplest explanation that agrees with the evidence that he just died?

gotocake 8y ago
I’m not sure that Occam’s Razor applies when the simplest explanation doesn’t fit all of the facts. It may still turn out to be true that he’s just dead, but that still leaves the question of the empty wallets, convenient timing, where he died, and his remains. If we accept his death, we need to make some more assumptions about the disposition of the coins, but if he faked his death we need no further assumptions. In addition faking your own death in this context isn’t exactly unheard of, and he couldn’t have picked a bigger haystack to get lost in.
deleted 8y ago
[deleted]

jen729w 8y ago

Wouldn't the public transaction records on the cold wallet addresses confirm or deny this (plausible) hypothesis?

xorcist 8y ago

This is pretty much what the article tells us, in more general terms: "a sixth appears to have been used to receive Bitcoin from another cryptocurrency exchange" Customers doesn't directly transfer funds to cold wallets (if they were they would be much easier to identify) and there's very little other reason to intermingle customer funds with proceeds from trading on other exchanges.