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Time to play the classic crypto exchange game: hack or exit scam? Disabling 2FA in this scenario is dumb enough to raise the question of malfeasance of the part

Time to play the classic crypto exchange game: hack or exit scam? Disabling 2FA in this scenario is dumb enough to raise the question of malfeasance of the part of this theft.

lolinder 5y ago
Somehow I doubt a fraudulent company on the verge of an exit scam would spend $700 million to rename an arena right before pulling the plug. Incompetent? Probably. Fraudulent? Unlikely. https://www.latimes.com/business/story/2021-11-16/crypto-staples https://www.latimes.com/business/story/2021-11-16/crypto-sta...
- otterley 5y ago
  The Houston Astros played at Enron Field until Enron was revealed to be a criminal enterprise and several of its leaders went to prison. The world has a short memory, it seems.
  - lolinder 5y ago
    What OP was referring to was a take-the-money-and-run plan where the company knows ahead of time that the whole thing is going to explode and causes it to on purpose. My understanding is that Enron's leaders were caught in fraud and that led to the collapse of the company—they weren't planning on it collapsing, so the investment actually made sense in that case.
- Applejinx 5y ago
  No, that's normal pyramid scam behavior. I would say it was more likely that they were fraudulent if they were escalating their meaningless promo gestures to keep anybody from cracking as their scam gets too big to keep together. The bigger the risk, the bigger the colorful gesture. I'm imagining it as '$700 million IN CRYPTO, which is of course better than money'. For a name: which could easily be restored if it turns out the payment is worthless. But that's just my fantasy of how this might have gone on. If it's $700 million in real money that only underscores how desperate they are to make some colorful gesture.
  - ashtonkem 5y ago
    Even your basic Ponzi schemes often involved generous and public philanthropic gifts even as the scheme was falling apart behind the scenes, just to maintain the public image.
    - Applejinx 5y ago
      Or rather, the scheme was being what it naturally was. Falling apart implies that there's a together for it to be, behind the scenes. When it's designed from the start to be an expanding shell powered by new belief coming in, the philanthropy and big gestures are core to the nature of what it is. Back in the day I read an old book by Harvey Mackay (iirc), one of those business-guy self-help books, and he had a chapter called never buy anything big in a room where there is a chandelier. :D The point being, it's normal for scamsters to influence people by making their pitch in a place all decked out to look like the most wealthy, influential place you could imagine, and there'd be a chandelier because it would look like everybody was rich. And so, never buy anything big in a room with a chandelier, because it probably meant you were being ripped off. All this predates crypto by a loooooong way. There's nothing really new. Maybe back in the days of travelling traders on camels it was, never buy a camel in a room with a carpet that's bigger than the camel is :)
- mdoms 5y ago
  Crypto.com is built on a huge marketing facade. Keeping that facade up until the moment the rug is pulled is the main part of the scam.
  - antifa 5y ago
    Maybe one employee decided to schedule an earlier exit without informing their co-conspirators.
- rrdharan 5y ago
  Not quite the same scale but the whole Color World 76ers thing is kind of in the same bucket?
blendergeek 5y ago
From the article: > No customers experienced a loss of funds. In the majority of cases we prevented the unauthorized withdrawal, and in all other cases customers were fully reimbursed.

Time to play the classic crypto exchange game: hack or exit scam? Disabling 2FA in this scenario is dumb enough to raise the question of malfeasance of the part of this theft.

lolinder 5y ago

Somehow I doubt a fraudulent company on the verge of an exit scam would spend $700 million to rename an arena right before pulling the plug. Incompetent? Probably. Fraudulent? Unlikely. https://www.latimes.com/business/story/2021-11-16/crypto-staples https://www.latimes.com/business/story/2021-11-16/crypto-sta...

otterley 5y ago
The Houston Astros played at Enron Field until Enron was revealed to be a criminal enterprise and several of its leaders went to prison. The world has a short memory, it seems.
- lolinder 5y ago
  What OP was referring to was a take-the-money-and-run plan where the company knows ahead of time that the whole thing is going to explode and causes it to on purpose. My understanding is that Enron's leaders were caught in fraud and that led to the collapse of the company—they weren't planning on it collapsing, so the investment actually made sense in that case.
Applejinx 5y ago
No, that's normal pyramid scam behavior. I would say it was more likely that they were fraudulent if they were escalating their meaningless promo gestures to keep anybody from cracking as their scam gets too big to keep together. The bigger the risk, the bigger the colorful gesture. I'm imagining it as '$700 million IN CRYPTO, which is of course better than money'. For a name: which could easily be restored if it turns out the payment is worthless. But that's just my fantasy of how this might have gone on. If it's $700 million in real money that only underscores how desperate they are to make some colorful gesture.
- ashtonkem 5y ago
  Even your basic Ponzi schemes often involved generous and public philanthropic gifts even as the scheme was falling apart behind the scenes, just to maintain the public image.
  - Applejinx 5y ago
    Or rather, the scheme was being what it naturally was. Falling apart implies that there's a together for it to be, behind the scenes. When it's designed from the start to be an expanding shell powered by new belief coming in, the philanthropy and big gestures are core to the nature of what it is. Back in the day I read an old book by Harvey Mackay (iirc), one of those business-guy self-help books, and he had a chapter called never buy anything big in a room where there is a chandelier. :D The point being, it's normal for scamsters to influence people by making their pitch in a place all decked out to look like the most wealthy, influential place you could imagine, and there'd be a chandelier because it would look like everybody was rich. And so, never buy anything big in a room with a chandelier, because it probably meant you were being ripped off. All this predates crypto by a loooooong way. There's nothing really new. Maybe back in the days of travelling traders on camels it was, never buy a camel in a room with a carpet that's bigger than the camel is :)
mdoms 5y ago
Crypto.com is built on a huge marketing facade. Keeping that facade up until the moment the rug is pulled is the main part of the scam.
- antifa 5y ago
  Maybe one employee decided to schedule an earlier exit without informing their co-conspirators.
rrdharan 5y ago
Not quite the same scale but the whole Color World 76ers thing is kind of in the same bucket?

blendergeek 5y ago

From the article: > No customers experienced a loss of funds. In the majority of cases we prevented the unauthorized withdrawal, and in all other cases customers were fully reimbursed.