For those unaware, Bitgrail recently revealed that it’s been hacked and is insolvent. For anyone who had funds sitting on the exchange, they’re gone now.
I bought RaiBlocks at .50c. I managed to transfer some of it over to a wallet, but some of it got held up in the Bitgrail scam. I don’t even give a shit now. I knew the risks and I’m still sitting pretty. A lot of other people aren’t, though.
(Quick Note on Nano: It’s still awesome. I’m going to buy some more through Binance and immediately transfer them over. I only lost money because I got lazy. Nano is also cheap as fuck right now because of all the FUD. There’s no problem with Nano’s code. It’s no one’s fault that Bomber is an idiot, except maybe his mother.)
Get this: Bomber, less than a week ago, told every Bitgrail user they had two weeks after sending in identity documentation to withdraw their XRB. At that time, though, you could terminate your account and withdraw BTC instead (without sending in any documents to get verified), which seemed to be a clear violation of Anti-Money-Laundering and Know-Your-Consumer laws. Why would AML apply to RaiBlocks but not bitcoin? They were both legally classifiable as internet assets. It’s not like Italian authorities differentiated between them. The answer at the time seemed obvious: Bomber could drive up the exchange rate of XRB to BTC, eliminate any and all arbitrage, and collect fees on the transfers. Win/win/win. Who was going to buy XRB that they knew they couldn’t withdraw for months? No one!
No one except Bomber, who ran the exchange.
Except it wasn’t that simple. It sounded good at the time — until it was revealed that Bitgrail was insolvent. Either from a hack or a coding error, all of the XRB was gone. In reality, Bomber had done nothing patently illegal at this point — until he made that announcement that Bitgrail users would have to send in ID documents to get verified before withdrawing XRB (but not BTC). Sure, he made a mistake on his exchange, either from a security or coding standpoint, but he had yet to outright lie to his userbase.
Let u/drumstick2121 uncover the big reveal:
He was selling the nano to other users buying it with BTC then sending the BTC to the terminated accounts. This is the definition of a ponzi scheme. The nano those users were purchasing with BTC didn’t exist.
As it stands, this is little more than a conspiracy theory that makes too much sense (but then again, so did the idea that Bomber knew about the rebrand beforehand, and that’s why he timed his announcement when he did).
Regardless, the lesson is clear: Don’t put all your eggs in one basket. It’s not exactly eye-opening. I don’t think it will earn me any more followers to this blog. It’s dad advice.
But it’s really good dad advice. Of the money you have invested in crypto, diversify and don’t be lazy. Get the crypto transferred to your personal wallet ASAP.
Then you don’t have to rely on the competence of others, which is kind of what decentralization is all about. It eliminates human error and greed as much as possible.
But that error and greed is still out there, so be careful.