Bitcoin Forum

http://blog.cryptsy.com/ (http://blog.cryptsy.com/)

Assuming its bigvern making the statement and the blog hasn't been compromised as well... which I think its him personally.

happened supposedly through a dodgy wallet... Don't they review all code?

This was already posted, not sure why it needs to be posted multiple times. Anyway I believe that it was a scam by the owner/(s) of the site and covered up by a scam, because if you had over 5 million dollars worth of BTC/LTC/other currencies then you would obviously need to spend hundreds/thousands securing your site. 

Does the Gov't accept donations to help speed up his prosecution?

so what now theyve been telling us in chat and in messages they would resume withdrawals it's obvious on some level they've been fraudulent whether the coins were stolen by an inside job or not

jshock nerdlife labs are frauds you cant trust any of them what do we do where is their cold wallet address
nerdlife labs was saying in chat that the thieves address was the cold wallet wheres the real cold wallet

Investors will probably help as well. damn if i have about 300btc in there and still have enough in my personal wallet i will probably give some for the prosecution just to have justice to my loss. :) unfortunately i don't have. 

Scams like these can ruin btc reputation.

boy is this a busy night for Bitcoin - Cryptsy officially announcing some crazy Trojan stuff and Hearn being so passionate about Bitcoin that he sold his coins  ??? ::)

Some shitcoin called "Lucky7coin" destroyed Craptsy?  ZOMG LMFAO IRL

This is glorious...true or not, it makes the point that if you lie down with dogs you get fleas.


but I repeat myself   ;D

The alleged theft occured 18 months ago.

Crytpsy has been (de facto) bankrupt ever since, running on a fraudulent fractional reserve.

Anyone who got preferential treatment by getting withdrawals approved ahead of other creditors is now liable to be the subject of clawbacks.

Big-shot VIP DASH whale Otoh, please pick up the white courtesy phone.  Your lawyer and accountant are on line one, something about wanting you to "stop digging."

It's only them to blame for ignoring the exploit when first it happened and look what happened now, people got affected and they only give the announcement regarding it now. Their ignorance and lack of action lead to this in the first place even though their taking some action now (too late already but better late than never I guess).

The latest thing it seems, is to blame hackers for poor business management. They got the heads up that there was a
hole and they ignored it like a ostrich with it's head in the ground. They have been bad actors in this scene for a while and people still deposited money there, after the news went out, that there were problems.  ???

1,000 BTC bounty anyone in ?

They fact that they didn't file for bankruptcy yet makes me think the story might actually be true..

Glad I stopped using them a while ago..

Probably one of the reasons why the really big exchanges don't want to deal with most altcoins, just not worth the risk.

wonder how low this will drive btc price down.   sub 400 for sure.   sub 300?

..hmm...it looks...dodge

I mean would you not run coin on VM sandboxed from everything else???? so that a trojan simply can not  claw its way back up?

i feel sorry for anyone who got screwed over by both gox and cryptsy.  these ppl will never trust crypto again

I'm going with $350 by the end of the weekend.

I am not surprised one bit. I never trusted Cryptsy ever and had a legitimate feeling something bad was going to happen. I feel bad for people who stored large amount of coins on exchanges and these "said" exchanges just "disappearing" with all these coins. Per se, this is a negative mark on bitcoin regarding this incident if it could be called that.

is there any way to contact bigvern / where is the official discussion thread?

he asked for ideas.

I mean if the liability of 3000BTC (like he wrote) was cur away in 1,5 years, the rest of 10000BTc could be too.
My 4th option is, to run the site to gain profits. this would take nearly 3-4years by the actual BTC price,
IF BTC rises the time could be shorten to 0,5-1 year (1000 or more usd per BTC)

I am not interested in another bankcruptsy like mt.gox becuase this will fire up a big party in the mainstream media against Cryptocurrencies which will damage the reputation for several years from now on! (mainstrem lives from bad news)

from:  blog.cryptsy.com

"Here are the transaction details from the Bitcoin wallet:

https://www.walletexplorer.com/wallet/0c07e0bec1002bd2

As you can see,  2014-07-29 13:17:36 is when the event occurred. "


So Cryptsy knew about the "theft / hack" for more than a year and did nothing about it?  Not even reporting it to authorities?  seems a bit fishy to me.

If a thief/hacker had stolen that many coins, they would have mixed them and sold them (or at least some of them) before news of the hack got out to maximize their profits - not just leaving them in the mentioned wallets waiting to be traced.

Seriously what were the developers doing for an year? I think cryptsy is just giving an excuse for the scam they pulled off and honestly this post doesn't hold quite significance for me.Not like Lucky7coin was the only developer involved,other coders might have had access to the code blocks and they could have figured it out sooner.

no, it isn't actually hacked, it is a form of lie using hacked scheme.
cryptsy is now in the china AFAIK, and he is attempting to launder his funds out.

If i had to bet on whats going on, this is my theory:

Cryptsy moved the coins into those separate wallets (probably still on their servers somewhere), then reports the "theft / hack" to see how far the FBI investigates or if FBI even gives a shit at all.   Cryptsy has left themselves a way out of blame by virtue of "computative error"  IF the FBI decides to investigate and can find how the coins actually moved.  If cryptsy would have sold the coins and FBI investigated and discovered it was an inside job by Cryptsy - then Cryptsy knows they would be screwed this way.  but by leaving the coins in those wallets (probably still on their servers) they are leaving themselves an out. Now cryptsy is simply waiting for the FBI's move - if FBI does nothing, then Cryptsy can move and sells the coins after the dust settles.

a real hacker would have used a mixing service and sold the coins by now.

Only thing now is to :- do remember all the Cryptsy team , Cryptsy fanboyz and devs that were along/supporting in this show all the time together for future such events be caught quickly ! As its the same people making making GOX show repeat again and again ! Specially the fanboyz who where telling i totally trust Cryptsy and they never go poof ! Similar to Garza fanboys ! Without this fanboyz, truth would have came out pretty soon ! Blind dumb herd mentality followers !

Vern should take a polygraph. Nerd Life Labs was saying in the chat that the thieves wallets were the cold wallets of cryptsy.

Another reason NEVER to keep your coins on any exchange. NEVER, NEVER, NEVER.

Cold storage is the only credible option.

These 10k BTC due are funds of their users. What now? U can kiss your funds good bye.

what is the chance they can be bought out? Sunlot?

Only thing now is to :- do remember all the Cryptsy team , Cryptsy fanboyz and devs that were along/supporting in this show all the time together for future such events be caught quickly ! As its the same people making making GOX show repeat again and again ! Specially the fanboyz who where telling i totally trust Cryptsy and they never go poof ! Similar to Garza fanboys ! Without this fanboyz, truth would have came out pretty soon ! Blind dumb herd mentality followers !

That's such a good idea, I've already started.

if ltc and btc were taken...then should not the remainder of alts be still ok to take?

even if  Vern sold alts for btc that was left, but even then the alts should still be on their exchange

accordingly, why should Vern shut up shop and not at least let people get thier alts out?

because the alts are now assets in bankruptcy proceedings/buyout/takeover

well presuming he has filed  petitioned and/or been given a sequestration order by a court .....he may be holding onto the alts to try and attract a buyer ....which could work out......

where is big vern anyway which country?

Probably back in america but theoretically can be anywhere. Who would be a potential buyer? Sunlot holdings? Gemini maybe?

This just highlights the unprofessionalism of Cryptsy as service and BigVern as business owner.

Stop blaming the hackers / scammers / phishers, Cryptsy acted irresponsibly silly with YOUR money by installing a software component (wallet) without any review. Additionally, the failed to implement any firewalling and / or limits to transfers and between Coins.

A Class action lawsuit is the right thing now imho, this people shoud never operate an Exchange again.

can you provide any transaction ids to prove he sold his coin?

i thought they were intelligent enough to analize three time each code of those scam, coin, well i guess i was wrong


well you need to keep a small sum for trading, any coins soem time is too slow, even with 30 sec block time, for fast tarding

in my memory, Cryptsy hacked every month.

Even if you take the blog post at face value, it's essentially an admission of fraud. They've been unable to fully pay out their customers for a year and a half now, apparently, and never said a thing.

Guess it's time to burn my Bigvern T-Shirt?

https://i.imgur.com/mX2keUI.jpg

I second this question.

He offers no explanation on this, which shows either incompetence or something else is afoot

eg seized and was selling off to get btc back to himself, so drawing down on remainder when people withdrew, so balances are fraudulent anyway or is keeping for sale.

I *feel* he may have been drawing down in the hope that he could recover enough profit to make up.

can any one confirm what alts were hard to withdraw leading up to this?

trading while insolvent can be another cause of action

Found one of hot wallets.
Look here: https://www.etherchain.org/account/0xc47aaa860008be6f65b58c6c6e02a84e666efe31#txsent
While user withdrawals was offline - someone who have access to cryptsy eth hot wallet withdrew that coins.

Heh, i dont believe that at all, cryptsy always been fishy , i tried to warn users many times, he didnt got hacked, i bet on that.

Millions of dollars stolen and there's not even one police agency to make a report to?

WOW, just WOW!

exactly -- and this is a breach of duty on their part which they'll be liable for. It's a fraudulent one at that, making the owner PERSONALLY liable (including his Blockchain-based holdings which can be traced and will be) for the return of OUR (users) monies held in his train wreck that he deceptively and fraudulently concealed up to the last minute.

Not more than yet another variation of what's actually a textbook case of bankruptcy fraud and ensuing liability of Paul Vernon himself. Bad luck for him (stupidity rather). I would have thought he was smarter than that.

They should post a part of the wallet's coding to show where the backdoor was implemented.

Here it is..

https://github.com/alerj78/lucky7coin/issues/1

What  a bunch of incompetent MF'ers IF true....

This is really sad news

yes, with a rant like that he should have provided proof he sold.

Terrible news to read about. I am sorry for everyone that had coins on cryptsy.

So it's all the coins not just btc and ltc.

Guess I'm out 15 cents.  lol.

Update: my balance (all 15 cents worth) has reappeared on cryptsy but wallets are "under maintainence" whatever that means.

This is the newest Cryptsy wallet, BigVern just took the money and bailed.
What a surprise - it's moving right now!

https://blockchain.info/address/3HNSiAq7wFDaPsYDcUxNSRMD78qVcYKicw

Because, clearly, these are Captains of Industry 2.0: they have more identities than a drug dealer has burner phones.

Wanna know why Cryptsy was the only exchange listing Lucky7Coin? Volume? No. Popularity? Bwha! No, it's was purposely installed as a measure to keep the money. IMO the only reason we're hearing from Big Vern now is because a civil suit was filed.

Your right.  I have 25 mill Maza locked up in there and I tried to get them out months ago.  I would do 25 999,999 transactions and they would end up only sending 1.300.  Such bull shit!!!

How do you know this address came from Cryptsy?

Totally fishy.  I'd almost say the story is a made up lie.  I'd be tempted to say that this is a complete inside job scam.

i tried to prevent people to stop using cryptsy for 1 year+ , but looks like just a few listened ; im not saying im a guru or something, but they always had troubles with deposits ... delayed withdrawals ... it was a warning since then

on another note, im glad i withdrawn all my coins back then , for the others, im sorry , very low chances to recover your coins

I don't believe they getting hacked is the main reason. Sure they can be hacked, but the main downfall is the investigation there are in.
They need to close down the company asap.

Else they will see more problems.

Now the cryptsy exchange website is down and maybe people had money inside there, but their blog is still up :(

I think they do that to inform people. There are not official news channels from cryptsy.
Even their twitter account is not updated anymore.

Hacked or not hacked.
It doesn't matter now, your money is gone. Big Vern made sure to have some wallets open for his personal gain.

Because why should they get paid back while the BTC or LTC holders get screwed? If they really are going to declare bankruptcy having a certain coin won't move you up the priority list for getting paid back.

Those people probably didn't lose enough money to cause cryptsy any trouble, so why piss off the people who did lose enough money to cause trouble any further?

I would really like some more information as to what is happening.
Will they honor withdrawals from other coins or just file bankruptcy?

How can one type of coin wallet gain control over another unrelated wallet? Surely you would have cross site security of some sort?

The Lucky7Coin wallet story is kind of a red herring, the real hack was the Bitcoin and Litecoin wallets doing unauthorized transactions. Rouge code that allows the execution of arbitrary commands is nothing new, and should be planned for.

Why would Crypsty keep millions of dollars worth of coins online in hot wallets? Surely any exchange operator knows that's a no no.

great news. now i know thats why bitcoin price going down fast. And i hope this problem will fix soon.
Almost 15% of my invest bitcoin lose because of this cryptsy scandal..

Why would they know or care that it was a "no no." It's not their money that's going to disappear.

It's just temporary, HODL and don't worry. Many different things they week lead to the price move.

This is not a problem which can be fixed easily. It's more a problem which can't be fixed. People have lost a lot of money in various of coins.
Which is bad for the general trust in bitcoin.

Because the huge bitcoin loss could destroy their business, especially if the US gov finds they didn't meet the security standards required by the accreditation they had to get to trade $US online.

The hack is not the real problem.
I thought about it and it makes no sense to reveal it now.
There incentive is to get some sympathy, while they file for bankruptcy a few days later.

Oh I don't know, maybe because they're a fucking exchange whose bread and butter is in those wallets?  I can't tell if yours is a serious question or just sarcasm.  Perhaps you should use the [/s] or something similar.

This is either outright scam or severe mismanagement or gross incompetence.  Time will tell.

Thier bread and butter wasn't in those wallet, their user bread and butter was in those wallets, they kept their bread and butter safe (or were able to keep going long enough after to make themselves safe, because I didn't hear any reports of staff going without salary to help make up the shortfall.

Doesn't really matter which of those 3 you listed it is, the end result for users in all those cases is the same, "sorry for your loss."

How do you know that it's cryptsy's wallet?