Slashdot Mirror

← Back to Stories (view on slashdot.org)

QuadrigaCX Allegedly Traded Against Its Own Customers Without Assets To Back Them (ambcrypto.com)

Posted by BeauHD on from the time-for-regulation dept.

geoskd writes: QuadrigaCX, the Canadian crypto exchange that made news recently with the passing of its CEO, Gerald Cotten, has been alleged to have been buying cryptocurrency from traders on its platform without having actual assets to perform the transactions. The transactions showed credit to the customers accounts, but when the customer tried to withdraw cash, they had to wait until other customers deposited cash before the funds became available. There is also an accusation that this behavior exists at many other crypto exchanges as well. Perhaps it is time to take a fresh look at Tether...

6 of 93 comments (clear)

  1. "Perhaps it is time to take a fresh look at..." by DogDude · · Score: 5, Funny

    No. Just stop. Really. Just stop.

    --
    I don't respond to AC's.
    1. Re:"Perhaps it is time to take a fresh look at..." by arglebargle_xiv · · Score: 5, Insightful

      The transactions showed credit to the customers accounts, but when the customer tried to withdraw cash, they had to wait until other customers deposited cash before the funds became available. There is also an accusation that this behavior exists at many other crypto exchanges as well.

      So you're saying they're just ordinary Ponzi schemes dressed up with fancy geekery? I'm shocked, shocked I tell you!

    2. Re:"Perhaps it is time to take a fresh look at..." by Guspaz · · Score: 5, Informative

      Except your money in a bank account is protected by the CDIC (if you're in Canada, or the FDIC if you're in the US), and there are all sorts of regulations to make sure that banks have enough money on hand to cover withdrawals under normal circumstances.

  2. Crypto is MLM by mabu · · Score: 5, Insightful

    It amazes me that this Ponzi scheme is still ongoing. There's ample evidence of wash trading at all the major exchanges.

    One of my favorite quotes on this is from the NYU economics professor who was famous for identifying the housing bubble, who also called out the crypto currency bubble in 2017, is asked again what he thinks of the crypto movement:

    "I also have attended many of these crypto or blockchain conferences. I met some of these individuals, and I must say I’ve never seen in my life people who on one side are so arrogant in their views, who are total zealots and fanatics about this new asset class, while at the same time completely and totally ignorant of basic economics, finance, money, banking, central banking, monetary policy.

    They want to reinvent everything about money, but most of them are absolutely totally clueless. The ratio between arrogant and ignorant is astounding — I have never seen such a gap in my life. These are fanatics. Some of them, like criminals, zealots, scammers, carnival barkers, insiders who are just talking their book 24/7.

    There is an element of excess in every bubble, but the typical bubble is an outgrowth of some technological evolution that maybe changes the world for the better. The internet was in a bubble in the late 1990s, but it was a real thing but valuations of many internet-related stocks were sky-high. Prices crashed and dot-coms went bust, but the internet kept on growing. Billions of people used it, and it has changed the world. Cryptocurrency as a technology has absolutely no basis for success, and the mother of all bubbles is now bust.

    Twitter and in-person interactions with the fans of cryptocurrencies made me stronger and more secure in my belief."

    1. Re:Crypto is MLM by mabu · · Score: 5, Insightful

      Well, in fairness, the early days of crypto currency treated crypto currency like an actual currency: having zero intrinsic value and mainly being a placeholder for goods and services that were exchanged. In fact the original premise of Bitcoin was as a micro-payment system of nominal value, allowing people to send tiny bits of pennies, that in aggregate would matter to third world countries and various charities, etc.

      What we see now, is something completely different: the treatment of crypto as an investment security itself, which makes absolutely no sense because it has nothing tangible backing it up.

      So the problem isn't with bitcoin as much as the perverse way people have now begun to use it, which is fundamentally different than how it was originally designed.

      Now bitcoin (and all crypto) is basically a distributed money laundering system with a Ponzi scheme on top. There is no reason for anybody to be in this space unless they're a criminal, or want to engage in criminal-like behavior (such as profiting by exploiting others and not offering anything of real value in return).

      Crypto and blockchain offer nothing to regular, ethical businesspeople. But they're like catnip to anarchists and narcissists.

  3. Cryptocurrency value for money by alvinrod · · Score: 5, Insightful

    I'm beginning to think that cryptocurrency is some of the best value you can get for your money. At least in terms of entertainment for the people who didn't invest in any of it. Maybe it will all eventually settle down and turn into a respectable currency, but right now you can't find a bigger shit show anywhere and it's utterly engrossing. We should at least require that all cryptocurrency algorithms do something useful like protein folding so that at least some good comes out of all of this idiocy.