I haven't been paying to the whole "cloud hashing" thing, but it seems to me a great cover for an old-fashioned Ponzi scheme.
1. Take investors BTC, "buy" gigahashes of mining.
2. Pay them back for a while using new investor's BTC.
3. Once you've got enough investors, take the BTC and run.
(maybe claim "oops, sorry, got hacked")
I'm not saying CEX.IO is a tarted-up Ponzi scheme. I have no idea.
I'm just asking how everybody who is giving them money knows that they aren't a Ponzi. Or aren't selling the same hardware twice or three times, operating a kind of 'fractional reserve' system (that will eventually fall apart).
Excuse me in advance if this has been discussed and I'm just missing something (e.g. a variation on Greg Maxwell's exchange auditing scheme might work: e.g. "they publish all the blocks found and an auditable merkle tree of all customers and how much hashing power each has").