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Is the COSS Exchange Shut Down an Exit Scam?

A forensics investigator in the blockchain sector believes that the COSS crypto exchange shut down was an exit scam. COSS, which is based in Singapore, shut down two weeks ago. It has been operating for three years. COSS is denying the allegation that it was an exit scam.

The exchange shut down suddenly with about $2 million worth of investor funds. It insists that it will continue being offline for about a month as it undergoes some upgrades. However, Rich Sanders, who is a forensic investigator claims there is no justifiable reason to shut down an exchange for 4 weeks.

Evidence of Scam

Sanders posted pictures on twitter, which show that COSS had moved some of its funds to Binance just before it shut down. Sanders believes that this is suspicious behavior. He might be right since his career is investigating ICOs.

He claims that the exchange plans to hide the funds before it finally announces that they have been stolen. According to him, this is a perfect crime. However, an official from COSS denied the claims via a tweet. He said that anyone could use a blockchain explorer to justify any claims he or she makes.

However, Sanders said that a user did not make this withdrawal. It was a person that owns an exchange wallet. Since then, the COSS exchange has revealed wallets for Ether holdings. The COSS official said that some of the other funds had been placed in a cold wallet whose address was not revealed.

If COSS wants to clear things up, it should reveal the wallet addresses of where the funds were sent. Besides that, it needs to disclose technical details regarding the planned upgrade. However, while customers have expressed outrage on social media, the exchange claims it will only reveal such details once it reopens.

This will not work out well for COSS when it reopens, it might end up losing all its customers due to mistrust. It is clearly not handling the issue well and it has been quite cagey about its planned upgrade.

 

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