Cryptsy: Have you heard about it? Ah, the old crypto trading days–roads without GPS, maps that didn’t have GPS. In the heyday of cryptocurrency, Cryptsy had a prominent place in that world. Paul Vernon launched it in 2013, and it quickly climbed the crypto charts. At its height, it was a marketplace for 200 different digital currency. This is a virtual treasure trove. As with many other stories of the gold rush, this one was not without mishaps. You can read blog here.
After 2015, cracks first appeared. Traders were complaining about withdrawals. Imagine waiting in line for hours to buy a latte. Then, you find out the shop is out of milk. The frustrations increased. The customers felt that they were living in a financial dark zone. Then came the news in mid 2015: Cryptsy had been compromised! Someone stole $5 million of Bitcoin and Litecoin. Hello headache!
Some skeptics insist it was inside work. Others say that it was the work sophisticated cybercriminals. Vernon hid this hack for months, whichever way you look at it. You catch my drift? Once the cat was released, a great deal of damage had been caused. Investors’ money was lost quicker than sand in a hourglass.
Vernon gave stern assurances about the resolution of all issues, but things went further down the rabbithole. It isn’t about the money, but about the promises that are made and their security. Once the confidence collapses, all that’s left is disappointment. And angry twitters.
Legal battles broke out like they were going of style. Lawsuits started to fly in all directions. Customers demanded that their cryptocurrencies be returned, while regulators wanted to know the truth. Vernon’s claims Cryptsy has been hacked, by an extortionist, didn’t cool the flames. Imagine attempting to convince a jury that your pet dog ate your schoolwork. But your homework this time is worth millions.
Cryptsy slammed its virtual front doors as the situation escalated in early 2016. Vernon was nowhere. He disappeared like a magician in mid-show. Some people said that Vernon disappeared into China. No cell phone means no forwarding. Good luck in chasing the rabbit.
Liquidation of the platform followed, and receivers appointed by the court tried to salvage what digital scraps they found. They were desperate to get their money back. It wasn’t about the lost bitcoins. It was about lost faith. It was like a bad divorce, leaving a bitter taste. Resentment and regret were mixed with a bit of betrayal.
Fast forward 2017: the FBI was sniffing about, trying to detangle the mess. At this point, the once golden platform was little more than an example of caution. John Doe, asset retrievals, multiple jurisdictions… The weekend felt like a binge watching of a popular soap opera. But in this case the real money was involved and there were real lives at stake.
Cryptsy’s tale serves as a cautionary tale for today’s traders. It’s wild and unpredictable out there. Keep your wits on you. It’s a bit like walking on a minefield. Diversify your investments and always do some research. Who wants the burden of a failed platform?
Do not rush into this world. Cryptsy has taught us many valuable lessons. Stay smart, informed, and never, ever believe promises that seem to good to be true. It is said that fooling me once would be a shame for you, and fooling me twice would be a shame for me. Cheers to safe trading!