Read recent vulnerability found on jaxx wallet which is one of the popular bitcoin/altcoin wallet used my thousands across the world.
https://cointelegraph.com/news/jaxx-wallet-vulnerability-users-report-400k-funds-thefts
Topic: Warning: Online-Wallets (Read 407 times)
If you have problems with these Exchanges – check your wallets on the Blockchain.
There seems to be a pattern to this back-door fraud that the Blockchain will reveal: even though the Exchange tells you that you have coins in your wallet – the Blockchain will reveal that soon after you deposited Coins into your wallet – they vanished into another wallet: without U being informed.
That is actually pretty 'normal' behaviour for most "online" services, like exchanges, where you don't control the private keys and just have an "account balance".There seems to be a pattern to this back-door fraud that the Blockchain will reveal: even though the Exchange tells you that you have coins in your wallet – the Blockchain will reveal that soon after you deposited Coins into your wallet – they vanished into another wallet: without U being informed.
The service controls the address, you deposit coins into 'your' unique deposit address... the service then credits the matching amount of coins to your account... effectively like a bank account really. They are then free to use these coins for whatever they want (like fulfilling other peoples withdrawls)... much like when you deposit $100 into your local bank, they don't put THAT specific $100 note aside for just you...
Then when you want to withdraw your coins, they just send you the matching amount using coins from any of the addresses they control.
Using a system like this actually offers the company some good benefits... in that it becomes possible to minimise transaction inputs, by having more flexibility to match a withdrawl request with an appropriately sized deposit amounts...
AND (despite the obvious security risks of letting "RandomCompany" Ltd. look after your coins) you get the added benefit of coin mixing!
Any online wallet or any wallet operated by a third party has the risk you are talking about. But we generally look out for reviews and other trust factors to open an account with them and just can pray for the best unless we are capable of going for own standalone /hardware wallet.
Just like the Windows and Apple operating-systems have all sorts of CIA/NSA/etc backdoors built into them, most if not all these Crypto "Exchanges" have built-in back-doors so Insiders can bypass all their security features and rob Wallets without notifying their victims.
If you have problems with these Exchanges – check your wallets on the Blockchain.
There seems to be a pattern to this back-door fraud that the Blockchain will reveal: even though the Exchange tells you that you have coins in your wallet – the Blockchain will reveal that soon after you deposited Coins into your wallet – they vanished into another wallet: without U being informed.
EXAMPLE: BIT.AC
https://etherscan.io/address/0x5527b5e52d8aaaaf4bee4013f8267dbbc12a2dbf
https://blockchain.info/address/1Ep5ExFj2tZCwME24hcPFrrvRqoo49FPEy
Any Exchange that OBVIOUSLY and purposely does not have a telephone-number to call is a RED-FLAG for FRAUD.
Any Exchange that does not respond to an email within 24 hours is a HUGE RED-FLAG. They probably don’t respond because they emptied your Wallet = CHECK the Blockchain.
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