They've admitted to being insolvent? It seems really irresponsible to allow trading of assets they don't hold in custody.
Seems like you're purposefully trying to conflate insolvency with being the victims of theft.
They are the victims of theft
and they are insolvent. These aren't mutually exclusive.
They are obviously not insolvent, they simply don't have the Monacoin to reimburse their holders, and whether you agree with it or not, they feel they did not violate the terms of their agreement with their customers, and are under no obligation to reimburse them.
Insolvent means being unable to pay their debts. That seems like the state of things to me. Livecoin should have converted MONA balances to debt tokens, denominated in fiat if necessary. Instead, they simply lost their customers' coins, refused to pay them out, and when customers complain, they disable their accounts and accuse them of violating terms.
This is obviously unscrupulous behavior. Stop trying to rationalize it.
This is actually pretty commonplace in exchanges. Poloniex, Bitfinex and others have passed losses on to their customers in the way of "haircuts."
Bitfinex immediately converted the insolvent accounts to debt tokens which they reimbursed. Livecoin did no such thing.
With regard to the recent margin lending fiasco, Poloniex has reimbursed 10% so far. We'll see what happens from here but I would say their actions have been less than scrupulous as well. I also think the risks with P2P lending are more concrete -- if borrowers default, lenders may not recover the principal. This is a peer-to-peer contract.
In contrast, customers deposited coins to Livecoin, Livecoin lost them in an attack due to their own negligence, and then they told their customers to eat the losses. These are two very different things.
Livecoin was attacked through a selfish mining attack. This has nothing to do with the developers.
Incorrect. Maybe you just made a typo, but it was Monacoin that was attacked. They were targeted because of their particularly vulnerable difficulty readjustment mechanism.
Yes, and Livecoin didn't account for the unreliability of Monacoin confirmations. They negligently accepted deposits and allowed withdrawals with far too few confirmations. They suffered double spending and passed the losses onto customers rather than eat the losses themselves.
Livecoin was allowing deposits, withdrawals, and trading and did nothing in spite of the known vulnerability. They were completely negligent. Imagine if exchanges accepted zero-confirmation transactions in Bitcoin and then began blaming Core developers because customers managed to double spend attack them. This is the same thing. It's laughable. An exchange needs to require sufficient confirmations and have internal controls to detect/delay fraudulent withdrawal attempts. You're giving them a free pass for their negligence.
When the attacks occurred on Monacoin, Bittrex didn't steal from their customers and permanently disable withdrawals. Livecoin should learn from their example.