Remember the buzz created by Cryptsy. For a short time, yes, Cryptsy became the darling of cryptocurrency traders. Launched in 2013, by Paul Vernon, this platform quickly gained traction. Many enthusiasts were attracted to the wide variety of altcoins. The ride was certainly a rollercoaster. Read here.
Cryptsy used to be the top spot for those who were familiar with these waters. Users were able trade any coin they wanted. Many found it like a candy-store – they could trade any coin and make a good profit. Sweet, right? But, the sweetness soon turned sour.
By late 2013, whispers had started to circulate. Customers were left without funds, transactions were held up in limbo. The service is almost nonexistent. For many, this is just the start of an incredibly long nightmare.
Imagine logging into your account, eager to close a transaction, and seeing that you have lost all of your money! For some, the money was not just small change. Their entire savings, or even significant investments, were simply gone. The platform didn’t fall because of technical issues or operational problems. The downfall of the platform was not just due to technical glitches or operational hiccups.
Paul Vernon is also referred to as Big Vern. Big Vern – what an interesting character. To say he had a controversial reputation would be an overstatement. When problems began to arise, he allegedly embezzled millions. The accusations weren’t made by just angry forum members. They were serious, backed up with evidence. He disappeared in the ether, leaving a trail full of empty wallets and broken trust.
What’s really the kicker? Cryptsy revealed that in the beginning of 2016, they had been hacked. Customers’ funds were missing to the tunes of 13,000 Bitcoins as well as 300,000 Licoin. Convenient, right? Some thought the announcement was a ruse. Vernon may have been syphoning funds from his account all along. His statements could not have been more unconvincing if he tried to read them from cue-cards in a dim basement.
Cryptsy’s wilder days are remembered in stories. On forums, people recount how they pleaded with customer support for months. Some users even took to Reddit in the hopes of finding someone who could assist. It was an incredibly chaotic time filled with frustrations and helplessness.
Cryptsy has sparked many legal battles. Cryptsy’s legal battles began with class-action lawsuits brought by users. This culminated in 2016 in a ruling in favor the investors ordering Cryptsy over $8,000,000 in damages. Unfortunately, it was little comfort for many investors whose money had long since vanished.
The entire debacle raised a huge red flag within the crypto-community. It emphasized the need to regulate the digital currency wild west and to do due diligence. You had stay alert all the time – not only for obscure or small exchanges, you needed to do this with each and every one.
Everyone who was investing in crypto at that time would do best to remember: Not all gold glitters. Cryptsy’s cautionary tale is the perfect counterpoint to every success story. It reminds you to keep your eyes open and be cautious.
It’s true that with the increase in decentralized exchanges as well enhanced security measures, trading has become safer. Cryptsy’s chaos is still fresh in the minds of all those who suffered through it. Now, let’s look out for eachother, share the hard-earned lessons and ensure fewer people become victims of crypto mishaps. Keep your crypto-keys close, stay smart, and be safe!