Big Vern finally broke his silence and opened up about exactly why Cryptsy has had so many problems. In a Blog post he admitted to a theft of 10s of thousands of coins, and operating a fractional reserve exchange while trying to make up for the loss:
Cryptsy has had problems for some time now and it’s time to let everybody know exactly why. These problems were NOT because of any recent phishing attacks, or even a ddos attack, nor does it have anything to do with me personally.
...
These are the approximate figures taken:
Bitcoin: 13,000 BTC
Litecoin: 300,000 LTC
He blamed it on a trojan from some random altcoin. Luckily, many people knew the troubles well advance. Readers of this blog were alerted months ago.
Bizarrely, Vern offered three options for bringing the matter to a close:
Bizarrely, Vern offered three options for bringing the matter to a close:
Here are our options:
1. We shut down the website and file bankruptcy, letting users file claims via the bankruptcy process and letting the court make the disbursements.
- or –
2. Somebody else comes in to purchase and run Cryptsy while also making good on requested withdrawals.
- or –
3. If somehow we are able to re-aquire the stolen funds, then we allow all withdrawal requests to process.
I’m obviously open to any other ideas people may have on this.
Something tells me that door #1 is where this is going.
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