Cryptsy has been a household word since the heady days early cryptocurrency. It started off with a boom–a digital platform promising to usher into a new trading era for altcoins. It was a success. It was Wild West-like for a while. Profits were to be had left and right. It was almost like printing cash at times. The euphoria that was felt at times was palpable. However, like with any party, if you roar too loudly the crash will be just as spectacular. Uncover more.
Cryptsy initially appeared to fill the gaping void of the newly-born market. Bitcoin was gaining popularity, but the other cryptocurrencies weren’t far behind. These “altcoins”, which are cryptocurrencies, needed a place to trade and buy. Cryptsy is the answer. The platform opened its barn doors and listed an incredible number of virtual currencies. The platform attracted both traders as well as speculators.
People started flocking to it. You could trade dozens and even hundreds of coins other platforms would not touch with a 10 foot pole. It was like a supermarket for cryptocurrency trading. It was as if Cryptsy ran like a machine. The grapevine was flooded with early success stories. Ones where traders turned $100 into thousands in a single night. There are bags of cash to be won, as long you have the right strategy or luck.
But, underneath the surface, dark currents flow. At first, there was a whisper. Someone’s funds couldn’t be withdrawn here. One person’s wallet balance disappeared mysteriously. But, hey, remember, this is the Wild West. There was always a risk involved.
In fact, those whispers had been warning shots. Cryptsy closed its doors abruptly on January 16, 2016. Paul Vernon (also referred to as “Big Vern”) said that software bugs and hackers had stolen millions in cryptocurrency. Users were left high-and-dry–coins had been sucked out of their accounts, and they didn’t have any more. As quickly as weeds appeared, class-action suits were filed and media attention was attracted.
It gets murkier. Big Vern is said to have fled town and gone to China. Since he couldn’t receive legal papers from across the Pacific, the lawsuits stalled. Cherry-picked exposed later that he moved funds secretly, filling up his coffers at the expense of users. Oh, humanity!
The scandal caused a stir in the cryptosphere. Once trust has been lost, it is very difficult to get back. Cryptsy’s reputation was covered in lawsuits. The result? A class-action settlement. Lawyers recovered some funds, with pennies on the dollar for disappointed users. By that point, the damage was out of proportion.
Cryptsy’s Legacy serves as an example of caution. It’s best to be on your guard when diving into crypto pools. Check, check again, and then listen to the whispers. Remember, where there is smoke there will usually be fire. Trust but check, goes the old saying.
Cryptsy’s rise is and fall illustrates an important lesson. In an era where fortunes are made over night, security can fall just as quickly. There are many pieces to a puzzle, and you may find that the picture is different from the one on its box. Buyer beware never rang truer. Don’t be naive, but do keep a keen eye and don’t put your eggs all in one basket.