Hong Kong’s Crypto Regulation Framework: How Hong Kong is Regulating
Warning: Why you should stop using 3Commas Crypto Trading Bot?
Recently, 3Commas an automated bot-based trading company launched a statement in their defence and justification.
This statement was in response to several complaints received and social media posts made with reference to claims and accusations that there has been a breach of security or a potential scam regarding the API keys that were used by users to synchronize their 3Commas website with multiple cryptocurrency exchanges.
How it all began?
The final running quarter of 2022, hasn’t brought a lot of good days for 3Commas or its users. The organization has been knee-high in controversies.
In the month of October, there were reports of 3Commas users’ API keys being compromised and misused in the now-bankrupt crypto exchange, FTX.
For clarity to those who aren’t fully aware, API keys or Application programming interface is a set of codes that initiates the connection and interaction of two different applications. In this case, the API key connects the automated trading bot that makes the trading decisions for you, with your crypto exchange of choice; where your crypto is traded by the said bot.
When the API key is accessed by an unwanted party, or compromised, the users’ money can be siphoned off or directed towards the fraudulent party’s choice.
When the above-mentioned situation occurred, FTX’s then CEO, Sam Bankman-Fried reportedly paid around 6 million dollars, to users whose API keys had been compromised and misused, due to what 3Commas claimed to be phishing.
Based on posts and complaints by several 3Commas users there was an outcry of accusations regarding misconduct by 3Commas and their misuse of user’s API keys.
Within the last couple of months over 40 verified users of 3Commas have accused that over a total of $14 million have been stolen in total. The causing factor of this controversy is numerous cases of unauthorized trades on their Centralized Exchange platforms.
A Twitter user with the username, ZachXBT has updated that they are moving towards filing a legal suit and 3Commas users who have been victims of these frauds can join them for the same. Following the uproar Binance, being one of the primary Crypto Exchanges where the misuse of API keys happened via 3Commas, was quick to state that Binance or its systems have nothing to do with the ongoing accusations or debasement of API keys.
Following the complaints and accusations, 3Commas launched an official statement as-
Even though some individuals have argued that the API keys have been stolen as a fault of 3Commas, we can assure you that to our best current knowledge the incidents did not occur due to the fault of 3Commas. On the basis of the information that we have today, we have found that no encryption protocols have been found to be compromised and no breaches of 3Commas’ account security databases have occurred.
This time again 3Commas claimed that the users losing their API keys and mismanagement of their funds wasn’t the company’s fault, an elaborate scam, or a gap in their security setup. The company shifted the blame to the victim of these frauds and claimed they were afflicted by phishing, malware, and malicious website scripts.
Should you stop using 3Commas?
While there’s always a conflict between giving the organization the benefit of the doubt or believing them over their clarifications and reasonings, it falls down to an individual’s decision on what they must do at times like these.
In a highly volatile market, tats are open to frauds and elaborate scams, with significant examples of said frauds taking place in recent times, it is only a smart choice to be a skeptic and a bit practically paranoid instead of losing your hard-earned money.
Overall, all the possibilities point to the direction that there is a possible point of leak, faulty system, or even external forces from where public money is being siphoned off.
Even if we are to consider 3Comma’s official stance on the matter it is apparent and clear to anyone who has an idea of how corporate systems work that the quote, “On the basis of the information we have today” in an official picture usually doesn’t paint a very optimistic picture.
Even if one is to believe 3Commas over their statement of the company not being responsible for any mismanagement but, it being the work of external parties; it is still obvious that there is a security flaw.
The repetitive pattern of these regulatory or security failures being exploited and the incapability of authorities to identify the external culprits, pops out the question: Is it time 3Commas users rethink using the platform?
Suggestively, it won’t be the worst idea to quit using 3Commas or switch to a different automated trading medium
Given the circumstances, with 3Commas trying to astray as far away from conflict and not taking accountability for a scam that has entrapped its users on multiple occasions, must make one think, who will they hold accountable or responsible if they face the same fate. Who would they complain to?
And with crypto still being a decentralized, intangible, risk asset, it is highly unlikely even a public outcry will force companies to change their course or attitude towards incidents like these; let alone solve an individual’s situation.
Taking an informed and smart choice needs to be of paramount importance to every player in the crypto market and one should make the above said qualities a priority over, convenience and blind-eyed trust.