Crypto One Stop Solution (COSS), a Singapore-based cryptocurrency exchange and Bitcoin (BTC) trading venue established in 2017, has come under fire for suddenly announcing that fund withdrawal and deposits will be unavailable for a month, to enable it to carry out a complete system upgrade, reports Decrypt on January 8, 2019.
Another Crypto Exchange Exit Scam?
Hacks, heists, and exit scams continue to be a pain in the neck for cryptocurrency investors and enthusiasts around the globe.
Singapore-based COSS exchange has succeeded in triggering serious fear uncertainty and doubt (FUD) in the hearts of its traders by suddenly announcing that it will freeze their funds for a month to carry out a system upgrade.
As stated in its blog post, COSS plans to disable all trading operations as well as deposits and withdrawals for the next three to four weeks, move all users’ funds in its hot wallet to a new wallet and take its current API offline.
The exchange said:
“During this time, we will be migrating all users to a brand new platform. All open orders will be cancelled, balances and accounts will be migrated, and your funds will be safe.”
COSS Traders Not Happy
Despite making it clear that its proposed system upgrade will allow users of the platform to enjoy a host of exciting features that are already available on other exchanges, including lightning-fast order matching, advanced APIs, support for Android and iOS, low latency for automated trading, among others, COSS users, as well as observers, have criticized the exchange over its latest action.
Oliver G, Product Manager at CoinMetro cryptocurrency exchange told Decrypt that:
“I suspect they do not have the client funds available to withdraw or there is another serious problem within their organization. I don’t agree with the communication today. Without any prior warning, they have frozen client funds for four weeks.”
Though it is quite uncommon for an exchange to abruptly freeze users’ funds without any form of warnings or notice to investors except when there is a heist or security breach, an unnamed COSS spokesperson has made it clear that the exchange is not running away.
“We are not running away. I’m still there. We deal with everything and we stay as transparent as possible,” he said.
In related news, earlier in May 2019, Cobinhood crypto exchange was accused of orchestrating an exit scam after it suspiciously filed for bankruptcy barely one month after raising $3 million from its DEXON (DXN) initial coin offering (ICO).
More recently, in November 2019, BTCManager informed that IDAX exchange CEO had absconded with clients’ funds.
While crypto exchange hacks enriched cyberpunks with an estimated $227 million during the first half of 2019 alone, exit scams and funds misappropriation reportedly netted fraudsters more than $3 billion last year.
As the cryptoverse continues to evolve, it is increasingly becoming crucial for hodlers to store their private keys themselves and embrace decentralized exchanges (DEXs), since if it’s not your private key, it’s not your money.