Is Cryptsy The Next Mt.Gox?
Cryptsy, one of the biggest altcoin cryptocurrency exchanges has experienced withdrawal and other problems for a long time.
Cryptsy, one of the biggest altcoin cryptocurrency exchanges has experienced withdrawal and other problems for a long time. If you are not a complete crypto-novice there is a high probability you have gone through, heard of or read about their strange behaviour towards customers (see here, here, here or here and here). Cointelegraph have sent some questions by e-mail but without any response.
Here are just a few complaints published on forums about a year ago...:
“When I try to withdraw my Doge I'm not getting sent a SMS code for 2-factor authentication, though it works fine when loggin in…”
“I just tried to move my Doge and BTC out of Cryptsy, but I'm having a hard time doing so as my 2-factor authentication code is not being sent to my phone.”
“I sold all my alts into BTC, bought Doge and now I'm out after a five day pending on LTC and Dash. The Doge was withdrawn in under an hour.”
“I contacted customer report over and over again only to received the same exact bot replied email. And then they kept telling me that my ticket has been closed and my issue is resolved. So all my Bitcoins are basically gone.”
“I had a 0.01 BTC transaction go through after around 15 hours of waiting. 12 days now on a 0.8 transaction.”
“I was able to eventually withdraw my BTC from one of my accounts for a sum of 1.4BTC. It took about 3 weeks and 2 tickets.”
“I have been playing with Cryptsy for a couple months, have heard this and was hoping it was wrong. I was able to trade out of some altcoins and get BTC sent. But as of yesterday I have not heard a word (have a ticket in) and have not received the 3 BTC that I am owed... Looks like it’s over…”
There are many users saying Cryptsy has never done them any damage, only put them through a lot of minor faults, slow functionality and terrible customer service, suggesting only sloppiness and a lack of professionalism. It appears the crypto-exchange has still had substantial trading volume and therefore was used widely by traders and speculators. And some of them were already prepared for the worst case scenario.
There has been a price premium for some altcoins compared to other exchanges. For example the Dogecoin 35% higher than elsewhere. Why? The reason could be that some altcoin payouts have continued as reported in forums. But dealing with an exchange facing problems is risky. Sure, you can buy elsewhere and sell on Cryptsy to make a profit using arbitrage. Up until the moment when you're unable to withdraw those funds from the exchange wallet. Remember Mt.Gox?
Speculation: A Possible Hack
The warning came only a few months after Cryptsy had started. One customer was able to withdraw 2 BTC more then planned and he contacted them right after. Another warning two years ago when a user mistakenly withdrew 60 BTC but returned the funds immediately. Is it too much of a stretch to suggest there might have been a successful hacker's attack with far more BTC stolen? So much that the exchange has been forced to play these ugly games with customers?…
“My condolences goes to anyone who is affected by the events that are taking place at Cryptsy. While I understand that dedicated traders usually have a huge portfolio of crypto coins stored on exchanges. People should have learned by now that cryptocurrency exchanges are not a place to store your digital assets. Traders unfortunately have no other choice if they want to trade but still entrusting your cryptocurrency with a third party is simply just begging for another Mt.Gox type drama,” Jure Pirc shares his personal view for CT.
He doesn't want to speculate and guess if what is going on at Cryptsy is an inside job or an actual hack and theft from a third party. “Cyber crime is not going to disappear in fact it’s going to be a huge challenge for any company that stores customer funds in the years to come. I personally am not a trader so I've never kept any coins on the Cryptsy exchange I do however have an account there and at the present time have no issues with logging in. For the sake of CT readers I will initiate a small BTC deposit, trade and withdraw and will post an update in the comments later on. Again to all of those that are affected by the unclear situation at Cryptsy a reminder not to use cryptocurrency exchanges as your personal coin vault.”
Evidently, Cryptsy swamps not only individuals but also other crypto-businesses. One of them is a smaller european exchange Litebit.eu. “We've had a good experience with Cryptsy in the past but last two or three months it's been a disaster. Withdraws are not coming through, support not answering. We have stopped trading with them,“ founder Kenny Rokven told Cointelegraph.
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