Another crypto exchange founder disappears with all the money

[bwall]

Two brothers in South Africa disappeared with $3.6b in crypto coins held by the exchange, Africrypt.

https://finance.yahoo.com/news/south-african-brothers-disappear-along-162726983.html

A total of 69,000 bitcoin are missing after the exchange was 'hacked'. The brothers now cannot be found. It would be the biggest crypto exchange failure ever.

Until this type of risk is eliminated, holding crypto will be undesirable for me. Bricks and mortar banks needed decades (centuries?) to find a way to eliminate this type of risk, but they finally managed. Until crypto can do the same, it's un-investable.

[GuitarStv]

Another example of the unbanked little guy winning by using crypto.  :P

[The Hin]

This may be old news to folks on here, but I am very much enjoying listening to the podcast Exit Scam (https://www.exitscam.show/), which deals with the collapse of the Canadian bitcoin exchange QuadrigaCX after the reported death of its founder in December 2018. 

[trollwithamustache]

Another example of the unbanked little guy winning by using crypto.  :P

to be fair, with Crypto you could store in on your own wallet, thus sidestepping the exchange risk. All of us suckers at Vanguard don't have a similar option, we are just hoping the SPIC is all its cracked up to be.

FYI, I haven't decided if I am serious or not.

[MustacheAndaHalf]

Another example of the unbanked little guy winning by using crypto.  :P

to be fair, with Crypto you could store in on your own wallet, thus sidestepping the exchange risk. All of us suckers at Vanguard don't have a similar option, we are just hoping the SPIC is all its cracked up to be.

FYI, I haven't decided if I am serious or not.

Apparently the odds are pretty good with SIPC protection.  99% of brokers never use it, and in the other 1%, conservatively 90% or more of assets are recovered.  The $500k SIPC protection is for that less than 10% of missing assets.  And individual vs retirement accounts are considered separately.
https://www.mymoneyblog.com/exceeding-sipc-insurance-limits.html

[bwall]

This may be old news to folks on here, but I am very much enjoying listening to the podcast Exit Scam (https://www.exitscam.show/), which deals with the collapse of the Canadian bitcoin exchange QuadrigaCX after the reported death of its founder in December 2018.

Thanks for the link! It's a very entertaining podcast. I had no idea the founder of Canada's largest Bitcoin exchange had such a sketchy past. I also learned a new phrase;

Apparently, this kind of thing (exchange owner running off with the money) happens so often that there's a name for it; 'exit scam'.

[marty998]

Recovering the crypto could be complicated by the fact that South Africa’s Finance Sector Conduct Authority, which would normally handle these matters, is unable to start a formal investigation, since cryptocurrency isn’t legally recognized as a financial product in the country.

Huh. Funny that.

[Wintergreen78]

Two brothers in South Africa disappeared with $3.6b in crypto coins held by the exchange, Africrypt.

https://finance.yahoo.com/news/south-african-brothers-disappear-along-162726983.html

A total of 69,000 bitcoin are missing after the exchange was 'hacked'. The brothers now cannot be found. It would be the biggest crypto exchange failure ever.

Until this type of risk is eliminated, holding crypto will be undesirable for me. Bricks and mortar banks needed decades (centuries?) to find a way to eliminate this type of risk, but they finally managed. Until crypto can do the same, it's un-investable.

I don’t think this was a failure of the exchange. It sounds like it did exactly what it was built to do.

[BicycleB]

^I am entertained.

Also LOL:

Another example of the unbanked little guy winning by using crypto.  :P

[bwall]

Two brothers in South Africa disappeared with $3.6b in crypto coins held by the exchange, Africrypt.

https://finance.yahoo.com/news/south-african-brothers-disappear-along-162726983.html

A total of 69,000 bitcoin are missing after the exchange was 'hacked'. The brothers now cannot be found. It would be the biggest crypto exchange failure ever.

Until this type of risk is eliminated, holding crypto will be undesirable for me. Bricks and mortar banks needed decades (centuries?) to find a way to eliminate this type of risk, but they finally managed. Until crypto can do the same, it's un-investable.

I don’t think this was a failure of the exchange. It sounds like it did exactly what it was built to do.

Hmmm......it sounds like you're saying that exchanges are designed for exit scams. Seems a bit cynical to me, although not too inaccurate.

[seattlecyclone]

Some exchanges are designed for exit scams. By design, it needs to be not obvious which is which until the exit occurs.

[Rosy]

Another example of the unbanked little guy winning by using crypto.  :P

Crypto investors are hardly 'unbanked little guys'.
I guess their clients didn't know about an exit strategy called a crypto wallet.

[Wintergreen78]

Another example of the unbanked little guy winning by using crypto.  :P

Crypto investors are hardly 'unbanked little guys'.
I guess their clients didn't know about an exit strategy called a crypto wallet.

Yes, if the crypto exchange you use is set up and operated by criminals, keeping your assets out of the exchange does minimize risk.