On November 3, Mercado Bitcoin, a Brazilian crypto exchange, publicly said it would cover the nearly $40 million in losses caused by a hack itself, without taking money from users.
This statement is more worth following than the hack itself. After an exchange is hit, it’s common to see withdrawals frozen while the incident is investigated, or some of the losses passed on to users. It’s unusual for an exchange to say outright, “The platform will bear all the losses.”
There’s just one thing to verify next: whether it will put an equivalent amount of compensation funds in an on-chain address that the public can inspect. If it only issues a statement and there are no corresponding reserves or transfers on-chain, the promise is, for now, just words. If a large amount of stablecoins or Bitcoin is later transferred from a cold wallet to a compensation address, that would show the pledge is more than empty talk.
This statement is more worth following than the hack itself. After an exchange is hit, it’s common to see withdrawals frozen while the incident is investigated, or some of the losses passed on to users. It’s unusual for an exchange to say outright, “The platform will bear all the losses.”
There’s just one thing to verify next: whether it will put an equivalent amount of compensation funds in an on-chain address that the public can inspect. If it only issues a statement and there are no corresponding reserves or transfers on-chain, the promise is, for now, just words. If a large amount of stablecoins or Bitcoin is later transferred from a cold wallet to a compensation address, that would show the pledge is more than empty talk.