Crypto.com Withdrawals Rise After CEO Admits Transaction Problem | Hacker News Reader

Crypto.com Withdrawals Rise After CEO Admits Transaction Problem

wsj.com

58 pointsmfiguiere15 comments

Mass education campaign, I love this chapter of crypto where even Proof of Reserves attempts are exposing incompetence to shake people into self-custody. All Crypto.com had to do was nothing, but the social pressure alone exposed an operational problem.

Never attribute to incompetence what could more easily be explained by greed.

as long as users do a mass mixture of self-custody and exiting the market entirely

I dont care why exchanges get into what they get into

How are large transfers like $400 Million not double, triple, quadrupled checked by multiple people before it's made? This boggles my mind.

Or reconciled via periodic book keeping? This mistake was made 3 weeks ago. The fact that the internet is doing accounting for crypto.com should be a huge red flag.

Is it the case that they hadn't caught the error until the public found out? Or just that they hadn't made any statement about the error until they had to? Because if they didn't actually correct the error until it was called out, that makes me think that surely there is something nefarious going on. Like an internal attempt to steal something.

Yeah, unsure. I just reread the article. It's not entirely clear to me. The CEO's Tweets from today seem to be a feeble attempt at "full transparency" which never seems to work well after the fact. It is also rather light on any meaningful detail around time lines. The last Tweet from him reads very much like "move along, there's nothing to see here."

Between this latest oversight, the connection to Ensogo and Wirecard, this CEO seems like just another huckster.[1][2]

[1] https://www.thedailybeast.com/cryptocom-ceo-kris-marszalek-h...

[2] https://www.coindesk.com/markets/2020/06/25/cryptocoms-card-...

Exactly. Thus it was probably not a mistake. It’s very hard for me to believe such a ridiculous explanation.

There's a rumor making the rounds that this $400M transfer was not an accident, but an intentional part of a scheme to defraud auditors. The rumor is currently unconfirmed.

> defraud auditors

Huh? Why would you take money from auditors?

What's the scheme?

Exchange A has an audit, asks Exchange B to temporarily send some large amount of funds while the Exchange A captures a snapshot of their reserves for the audit.

Ah! Not quite, but similar to "check kiting".

They are not double checked for the same reason why the FTX CEO got leverage numbers wrong due to poorly labelled accounting ledgers: these folks are making it up as they go, and don't want to pay adults to look over things.

http://archive.today/XyTvc

I just pulled out everything from my Nexo account a few hours ago. We'll see how long it lasts.

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