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The Worldwide Account Protection Program seems to be a way for Crypto.com to limit their exposure, while marketing it as "protection" for the customers. Around
by zknill 5y ago
The Worldwide Account Protection Program seems to be a way for Crypto.com to limit their exposure, while marketing it as "protection" for the customers.
Around $34million stolen, 483 users affected. If the funds were spread evenly, then each user would have lost about $71k. But the funds won't be evenly spread (average). It's likely some users will have lost much more, and some much less.
From the announcement, it looks like Crypto.com is making the users whole again;
> No customers experienced a loss of funds.
This means that (in some cases) Crypto.com was on the hook for much more than $71k / user. The WAPP appears to put a series of conditions on the user, and introduce an upper limit to the amount that Crypto.com will return in the future.
> WAPP restores funds up to USD$250,000 for qualified users; terms & conditions apply.
> Enable Multi-Factor Authentication (MFA) on all transaction types where MFA is currently available,
> Set up an anti-phishing code at least 21 days prior to the reported unauthorized transaction,
> Not be using jailbroken devices,
> File a police report and provide a copy of it to Crypto.com; and
> Complete a questionnaire to support a forensic investigation.
This looks more like a mechanism to limit Crypto.com's exposure to future events than it does a policy to protect users.
- loceng 5y agoAnd so what are we going to do as a society with these stolen funds? Playing a wallet mixing tracking game is a rat race and a waste of energy, otherwise we need a centralized system [on an immutable blockchain] to keep track of stolen funds, to then cross-reference every transaction with at point of sale/transfer - to then prevent it, no? If not a centralized solution like above then what? We just allow stolen funds to be used now or any point in the future, rewarding criminal behaviour?
- roywiggins 5y agoThere's no centralized system to track stolen dollars (at least not in the sense you're talking about), so I don't know why crypto would necessarily need one.
- capableweb 5y agoDoesn't the USD have a unique serial number associated with each bill? I'm sure when banks make in-transport transfers between entities, they know exactly which series they are transporting, and if a robbery happen, they share those series that got stolen with the police. If the police makes some unrelated arrest and find a bunch of bills, they can probably trivially look up if that money have been involved in anything before that.
- AlexandrB 5y agoDoesn't some federal law enforcement agency track serial numbers of stolen cash? Or have I been watching too many crime dramas?
- lottin 5y agoLook up "anti-money laundering".
- CPLX 5y agoDidn't they say that 443 BTC was stolen? Isn't that around $200MM all by itself? Or did I miss a part of this?
- eof 5y agoI think you’re right, mostly. As a user I’d like to know explicitly what my risk factor is. Any exchange or custodian has a non zero chance of getting hacked or inside-jobbed; unlike fiat currencies there is no judicial process that is going to maybe let me claw my stuff back. A sort of fdic insurance for custodian crypto accounts, is an inevitable market solution.
- KennyBlanken 5y ago>From the announcement, it looks like Crypto.com is making the users whole again; >> No customers experienced a loss of funds. Let's believe that when we hear someone other than the company saying it. > File a police report and provide a copy of it to Crypto.com Yeah, I'm sure tons of crypto holders will get right on that.
- gowld 5y ago> This looks more like a mechanism to limit Crypto.com's exposure to future events than it does a policy to protect users. That's fine. It lays out the risk exposure in concrete terms and defining their market offering. If you use a jailbroken device, or have more than $250K in funds, or are holding crypto for illegal purposes, don't put it in Crypto.com. Same as FDIC insured savings accounts that are limited to $250K.
- wpietri 5y ago> No customers experienced a loss of funds. I mean, there's still plenty of money in other people's accounts they can use to cover the losses. Does anybody know whether the regulatory regime they operate under is sound? If a US bank lost this kind of customer money in a theft, I'd have some confidence that the the FDIC and the Federal Reserve would make sure they actually had all the money they were claiming they had. But personally I'd hate to bank purely on the internal controls of a Singaporean subsidiary of a Maltese company.
- GrumpyNl 5y agoPlease explain how they can use the money from other people account to cover the losses. If i had a account there, i wouldn't allow them to use my money to cover this.
- secondaryacct 5y agoEasy: imagine one of the poor sobs decides to withdraw, hop a bit of creative accounting and your money is borrowed to pay for the withdrawal. It s not each of the user individually seeing their balance go down, it s the company lying even more about its ability to liquidate all accounts. Your number on their html page they graciously present to you will go unchanged. It s not a new phenomenon, every bank does it, except crypto.com does it to pay losses for a theft while banks would do it to lend to a baker buying a bakery on mortgage. If said baker screws up and cant repay, and many more others as well, clients cant all withdraw the pretty number. Another interesting difference is that a bank pays you for lending to them with your savings account, at market rate (very low these days), while I dont think crypto ponzis do because you re suppose to just wait and moon.
- ashtonkem 5y agoAlso, banks are insured by the government (FDIC) and heavily regulated to reduce the risk of failure. Crypto exchanges are not, which is why they seem to fail about as often as a 19th century bank would.
- boring_twenties 5y ago> Not be using jailbroken devices So does a normal PC count as a jailbroken device? If not, what makes having root access on a phone any different?
- vmception 5y agoSure but exchanges have their own treasury, they make alotttt of money Why lead with the ponzi assumption? There are so many more quantifiable assumptions