CRYPTSY stopping withdraw locking accounts without notifying users! Class Action

[Hippie Tech]

D1P3 - TNABC 2015 - PAUL VERNON CEO CRYPTSY From Bitcoin to Dogecoin: https://www.youtube.com/watch?v=jdOEgAG8PLU

Here's Paul Vernon's timeline (you're not gonna believe this!):

2011: Fires up a GPU in the living room. Wife mad cause it made too much noise, blah blah blah. Paul quits Bitcoin end of year.

2012: Paul registers Cryptsy.com (he did that mention this fact).

2013: (... wait for it ...) Paul rediscovers Bitcoin via some article. Pulls out the old GPU and fires it back up, but no bitcoins (he figured out why - ASICs). He found an old wallet and realized he was rich. (... here it comes ...) (paraphrased) "This was about the time that Litecoin was created sparking my interest anew. So, back to BitcoinTalk I cruised."

For those slow and didn't catch it:

Via Wikipedia: Litecoin   Date of introduction   7 October 2011; 4 years ago

To be fair to Paul, I'm only 5 minutes into the 20 minute video, so perhaps he corrected his mistake somewhere within.

EDIT: Holy fuckin' shit! (~5:15 minute mark) He just said that after finding Litecoin (2013) on a thread, he reworked his GPU and starting mining litcoins. It was easy because the difficulty was low and not many people were mining it. Paul Vernon has lost his motherfuckin' mind!

Thanks to HippiTech's post at Feathercoin, I watched above youtube video.
It surprised me Paul confessed two things during the talk:
1. 2min10: Paul confessed with bitcoin he gets "to feel like a hacker".
So Paul translated his feelings (words) into deeds?!

2.6min43: "Paul confessed he generates about 20 different coins, and makes a new coin when the difficulty for mining gets to high".
It is many times discussed in this thread that cryptsy listed a lot of "in house scam coins" created by their own developers copy coin cloners, but it is nice to hear it straight from his mouth.

About his story fairytale about litecoin, Paul is at least consistent. (that he discovered and mined LTC not earlier than 2013):
https://www.youtube.com/watch?v=3Vynm0xbCak

That vid also makes it obvious that he is either a noob coder (knows only the basics) and/or that he is being parroted to sound like a pro.

[thunderjet]

OKCoin address 1NLCnAtWijTNoZG97uPAXVjMRA4HJzHkzH got 60.89 BTCs from Cryptsy hacker.OKCoin is mixing coins,so when you withdraw you get someone other coins.These coins from OKCoin went to Huobi and then to Bitfinex,but I dont believe they belong to same person.

Important thing is that OKCoin in entering point.

[thunderjet]

Found a very solid link which can reveal who is behind Cryptsy hack.Hacker is US citizen for sure and there is another US citizen who bought BTCs directly from him.


During investigation of hacker BTC wallet:

https://www.walletexplorer.com/wallet/1356a64174770337

 where he stored BTCs obtained from selling stolen altcoins I investigated first output txs from his wallet,made on 18th.Aug.2014.He sent 28.7359 BTCs to address 1BtSypm6re3o4ed2VQzz4tffdiXuVe7w5X


https://www.walletexplorer.com/wallet/1356a64174770337?page=3

https://www.walletexplorer.com/txid/22947bd79b21b9afd85f15cb2941c994a070f99440bb45ac1002409ef19e5015








It is first transaction in his provisional wallet:

https://www.walletexplorer.com/wallet/00751a63ec1b72e0







In this wallet he amassed about dozen input transactions(mostly from BTC-e) and sold them in one 100 BTC transaction to address 13BEFFkYAWQ3TKh21pb7uyZxdUcWwDfxHQ,part of wallet 3f269ef6d7a3eca7  :

https://www.walletexplorer.com/txid/5bac649d0808c4d2cba6c2f873f2d02316ce4f376d69230c4f7023c3b849250d

https://www.walletexplorer.com/wallet/3f269ef6d7a3eca7











Now very interesting part - person who bought these 100 BTCs(~$50000 worth then) was no other than Burt Wagner(known as Burt W), Bitcoin trader who was arrested by federal agents in October 2014 in Colorado.He bought them on 27th.Aug.2014


Wallet :

https://www.walletexplorer.com/wallet/3f269ef6d7a3eca7

belongs to him.First address made in his wallet is vanity address:  1BurtWEejbnKeBRsvcydJvsNztB1bXV5iQ made in 9th.Oct.2011.






He was arrested by federal agents on 14th.October.2014 and released after court dismissed indictement against him on 13th.July.2015

http://www.burtw.com/


http://www.coindesk.com/charges-against-colorado-bitcoin-trader-dismissed/










As you can see in his wallet there is a big hole in transactions between 10th.Oct.2014 and 17th.July.2015


https://www.walletexplorer.com/wallet/3f269ef6d7a3eca7








Another proofs came from himself - by his words Homeland Security permanently forefited from him 186 Bitcoins and they are on address 1Eu38i1DkRAPAJhSqbseVroJDpMRfJbAx3

https://www.walletexplorer.com/wallet/0e3acd27a5a45f7b

http://www.meetup.com/Colorado-Bitcoin-Society/events/224676885/







If you carefully look at that wallet where 186 seized Bitcoins are, you can see that they returned directly in his wallet rest of 30 BTCs :

https://www.walletexplorer.com/txid/e0cc327019d3e21edf89be242e113428498725bf8652f6432d8f6f3bcf17c064









Also if you go 2 steps backward you will come and see 800 BTC transaction when federal agencies remove them from his wallets to theirs:


https://www.walletexplorer.com/wallet/424fdc616885bb6d


Also you can see that after his release they forefited 186 BTC ,but returned rest of them in his wallet 3f269ef6d7:









Burt Wagner bought 100 BTC worth ~ $51000 from Cryptsy hacker on 27th.August.2014.No doubt he has remebered such big transaction.All blockchain evidences point that was out of exchange, direct sale,person to person.

By his words he was buying BTCs from fellow Bitcoin traders by buying BTCs directly from them in meetings arranged in local coffee shops,so he must know identity of person who sold him 100 BTC obtained from selling stolen Cryptsy altcoins:


http://www.dolpress.com/news/2016/4/17/no-greater-tyranny

[ð]

Local bitcoins and coffee shops

After his arrest, Burt was taken to Denver County jail

Colorado. Which of those Crypsty shitheads are from there or are connected to Colorado, now or back towards the end of 2014?

[Gleb Gamow]

Local bitcoins and coffee shops

After his arrest, Burt was taken to Denver County jail

Colorado. Which of those Crypsty shitheads are from there or are connected to Colorado, now or back towards the end of 2014?

My money's on 3-LAs using funds sourced directly or indirectly from Cryptsy sold to Burt for fiat.

[BurtW]

As everyone knows I am a long time supporter, enthusiast and activist of Bitcoin.

As I have repeatedly stated (check my post history) I personally believe the single largest threat to the entire concept of Bitcoin would be the loss of the fungible nature of Bitcoin.  Loss of the fungible nature of Bitcoin would demote it from a "money like" thing to a collectible thing.  The difference is that a collectible must be appraised and graded by a "trusted third party" in order to determine its value (think diamonds for example).  This would totally destroy Bitcoin and is the most likely path anyone who wanted to destroy it would take.

I am not one to just sit back and do nothing when it comes to my ideals and beliefs.  Therefore believing that periodic mixing of coins is one sure fire way to ensure the long term viability of Bitcoin I periodically run my coins through a mixing service.

On the day in question I sent about 105 BTC through a mixer and got back about 100 that were totally unrelated to the 105 BTC I sent into the mixer.

As you have found out from your extensive research some or all of those 100 BTC came from the entity you were tracking.  They simply put them into the mixer at about the same time as I put my into the mixer.

Good news:  The BTC you are tracking are now in the possession of the Federal government here:

https://blockchain.info/address/1Eu38i1DkRAPAJhSqbseVroJDpMRfJbAx3

[Hippie Tech]

Local bitcoins and coffee shops

After his arrest, Burt was taken to Denver County jail

Colorado. Which of those Crypsty shitheads are from there or are connected to Colorado, now or back towards the end of 2014?

42coin's craptsy inhouse shitcoin dev, hendo420 ..
https://bitcointalk.org/index.php?action=profile;u=25129

AND known scammer Matt Carsen aka. borito4, bobsag3 ...
https://bitcointalk.org/index.php?action=profile;u=144143

both have claimed to have moved to the same city/area of Colorado within days/weeks of each other.

At about the same time or during the same year, Spoetnik became neighbors with Crestington after his cross Canada move from Horus's area.

If Bruno doesn't beat me to it, I'll dig up some quotes later. xD

[thunderjet]

As everyone knows I am a long time supporter, enthusiast and activist of Bitcoin.

As I have repeatedly stated (check my post history) I personally believe the single largest threat to the entire concept of Bitcoin would be the loss of the fungible nature of Bitcoin.  Loss of the fungible nature of Bitcoin would demote it from a "money like" thing to a collectible thing.  The difference is that a collectible must be appraised and graded by a "trusted third party" in order to determine its value (think diamonds for example).  This would totally destroy Bitcoin and is the most likely path anyone who wanted to destroy it would take.

I am not one to just sit back and do nothing when it comes to my ideals and beliefs.  Therefore believing that periodic mixing of coins is one sure fire way to ensure the long term viability of Bitcoin I periodically run my coins through a mixing service.

On the day in question I sent about 105 BTC through a mixer and got back about 100 that were totally unrelated to the 105 BTC I sent into the mixer.

As you have found out from your extensive research some or all of those 100 BTC came from the entity you were tracking.  They simply put them into the mixer at about the same time as I put my into the mixer.

Good news:  The BTC you are tracking are now in the possession of the Federal government here:

https://blockchain.info/address/1Eu38i1DkRAPAJhSqbseVroJDpMRfJbAx3

Thanks for your quick answer.You have valuable informations which can identify Cryptsy hacker,so your help would be much appreciated.

You are right,some of Cryptsy hacker BTCs are really now in federal possesion,but let that put apart and concentrate on how these BTCs got to you.

You said that on that 27th.Aug.2014 you put about 105 BTC in mixer and got back 100 BTC unrelated to these ones you put in mixer.I carefully look at that 100 BTC input transaction I can say they were not in any mixer.I know how mixers are tumbling and splitting BTCs ,but this one was direct transaction to your wallet.

Cryptsy hacker moved his 28.7359 BTCs on 18.Aug.2014 from his wallet to wallet from which you directly got 100 BTCs.If he likes you put them in the same mixer,mixer would split his coins in many small pieces and tumble them many times with other coins before exit.But these BTC were no splitted or tumbled at all,just removed from one to the other wallet.

Hacker transation:

https://www.walletexplorer.com/txid/22947bd79b21b9afd85f15cb2941c994a070f99440bb45ac1002409ef19e5015


Maybe you think on some others transactions on that day ? - because you have numerous input transactions in your stache(or cold) wallet on same days - 27th and 28th.August.2014 - wallet federal agents seized with 800 BTC in it(mark red) :

https://www.walletexplorer.com/wallet/1171b3f241b86bac

Only last one input transaction of 100 BTCs(which came from yours personal wallet and contains hacker 28.7359 BTC in it) was made on other date - 1st.Oct.2014 (mark purple),but even that one came in your personal wallet on 27th.Aug.2014







When I look at other input transactions to your big 800 BTC wallet,I see striking resemblance with the wallet from which you got 100 BTCs and with hackers 28.7359 in it:


Compare wallet where hacker 28.7359 were(first input transaction):

https://www.walletexplorer.com/wallet/00751a63ec1b72e0

and others which filled your big wallet:

https://www.walletexplorer.com/wallet/03647a46a057c5b3

https://www.walletexplorer.com/wallet/04c6fc3ece11c8e5

https://www.walletexplorer.com/wallet/02d11321be0650b2

https://www.walletexplorer.com/wallet/04f68e5293356453


they were all formed at the same time(18-20.Aug.2014) like 100 BTC wallet and moved BTCs in close to 100 BTC batches to your big wallet


There were no mixers - if you look at one of these wallets :

https://www.walletexplorer.com/wallet/02d11321be0650b2

you will see, it sent 2 transaction to your big wallet in 2 days - no mixers work like that:







So it is essential that you remember from who you bought these 28.7359 BTCs on 18th.August.2014. That was direct input in your wallet,no mixing.

Maybe some of other inputs to this your wallet ( https://www.walletexplorer.com/wallet/00751a63ec1b72e0 )passed through some sort of mixing(most of them are BTC-e output),but Iam 100% sure that this is not case with first input of 28.7359 BTCs

[BurtW]

First let me say WOW you are sure good at this stuff!  

The address:

https://www.walletexplorer.com/address/13BEFFkYAWQ3TKh21pb7uyZxdUcWwDfxHQ was mine

You can see it was originally funded in this transaction:

https://www.walletexplorer.com/txid/5bac649d0808c4d2cba6c2f873f2d02316ce4f376d69230c4f7023c3b849250d

Where I moved exactly 100 BTC from 13FSEdyNYDSUx3FDfQ9TRQtEM3qoHpxMUS to 13BEFFkYAWQ3TKh21pb7uyZxdUcWwDfxHQ

The address:

https://www.walletexplorer.com/address/13FSEdyNYDSUx3FDfQ9TRQtEM3qoHpxMUS was also mine

You can see it was originally funded by these two transactions:

https://www.walletexplorer.com/txid/2064ea10b5a565b99217d6e4e63a7e89a012d7a9bb156849c41e2604e411cc60 for 0.54117092 BTC

and

https://www.walletexplorer.com/txid/6da9edae3fa24b75d28e09ca1dc09860acf0855e8c7adb6df100dbe10366556a for 99.45882908 BTC

The mixer I use always gives me back two transactions to fund the output of the mixing.  One is small and one is large.  In this case 99.45882908 + 0.54117092 = 100 = the output of the mixer to me.

My records indicate that the output from the address you are following:

https://www.walletexplorer.com/address/1BtSypm6re3o4ed2VQzz4tffdiXuVe7w5X

Was directly sent to me as part of this transaction:

https://www.walletexplorer.com/txid/6da9edae3fa24b75d28e09ca1dc09860acf0855e8c7adb6df100dbe10366556a

Which, unfortunately for your efforts in tracking the culprit, was the larger of the two (99.45882908 + 0.54117092 = 100 BTC) transactions being returned to me from the mixer.

I was really hoping it was someone that I had bought BTC from on localbitcoins and was actually excited by the prospect of possibly being able to help you guys out but unfortunately that is not the case.

I never got to see all the evidence collected against me by Homeland Security.  From the evidence I did get to see I have been able to figure out most of the people I traded with on localbitcoins that were actually undercover operatives working for the various agencies involved in "operation Avalanche" - the large operation that I and several other Bitcoiners were swept up in.  However, there is one person I did a lot of trading with that my wife and I suspect was an undercover operative but was never able to prove it.  In fact, having to release his identity to me in a trial may have been one of the reasons they decided to drop the charges - to protect his identity for future operations.  That would have been so sweet if your research had somehow helped me in mine.

[tema]

When similar will on Cryptsy.com?

[thunderjet]

Burt,thanks a lot for your clarification !

Whole thing is now much more clearer.


It seems that mixer you used - Bitmixer.io did something very unusual in this case - in your exit transactions, as a part of it, they sent you totally unmixed coins,directly taken from Cryptsy hacker wallet.
There was no even mixer deposit address for Cryptsy hacker coins,nothing.


They did not mix or split them,they were just taken from Cryptsy hacker wallet and put them in Burt exit transaction.


How they can explain that? Are they have some direct agreement with Cryptsy hacker ?

From analysis of other output transactions,it seems that Cryptsy hacker used Bitmixer.Io for almost all output transactions(every mixer has a specific culprit),not just for this one with Burt.

Again,Burt thank you for your valuable informations!

[Cryptcracker]

I was hacked! Disregard my 3rd dispatch and the statements of the Satoshi murder in it.

[BurtW]

The way Bitmixer.io works is they have a large pool of BTC they use for mixing.  If you let them use your BTC in the mixing pool you get a certain amount of income (interest) for letting them use your coins in the pool.

In the past I thought about doing that - letting them borrow BTC from me so I could make the income on the lent coins.  However, when I asked about it they said that they had enough investor/lenders at the time I asked so I never did it.

Perhaps, maybe, not sure, but maybe the behavior of the coins in question (not split up and then recombined like most coins) indicates the hacker is one of these people who directly lends their BTC for mixing?  If so that is a finite pool of people.  But, a list of the "investor/lenders" would be difficult or impossible to come by.

After lending BTC to Bitmixer.io for a period of time the lender could then withdraw their BTC and get back different (so mixed) coins plus interest.

[silvermetal]

The way Bitmixer.io works is they have a large pool of BTC they use for mixing.  If you let them use your BTC in the mixing pool you get a certain amount of income (interest) for letting them use your coins in the pool.

In the past I thought about doing that - letting them borrow BTC from me so I could make the income on the lent coins.  However, when I asked about it they said that they had enough investor/lenders at the time I asked so I never did it.

Perhaps, maybe, not sure, but maybe the behavior of the coins in question (not split up and then recombined like most coins) indicates the hacker is one of these people who directly lends their BTC for mixing?  If so that is a finite pool of people.  But, a list of the "investor/lenders" would be difficult or impossible to come by.

After lending BTC to Bitmixer.io for a period of time the lender could then withdraw their BTC and get back different (so mixed) coins plus interest.

How did you know that thunderjet posted something about your wallet?
Did you follow this thread or was you pm'd by thunderjet or somebody else?

[Gleb Gamow]

I was hacked! Disregard my 3rd dispatch and the statements of the Satoshi murder in it.

I believe you. Glad you got your cred back. We look forward to a real 3rd dispatch unless, of course,you opt to call it the 4th dispatch.

[Al the Alpaca]

I was hacked! Disregard my 3rd dispatch and the statements of the Satoshi murder in it.

I believe you. Glad you got your cred back. We look forward to a real 3rd dispatch unless, of course,you opt to call it the 4th dispatch.

Okay, this is Gleb's other alt account. Gleb was hacked, hence the post above. He now has control of the account. Update-cum-dispatch forthcoming.

[Gleb Gamow]

The way Bitmixer.io works is they have a large pool of BTC they use for mixing.  If you let them use your BTC in the mixing pool you get a certain amount of income (interest) for letting them use your coins in the pool.

In the past I thought about doing that - letting them borrow BTC from me so I could make the income on the lent coins.  However, when I asked about it they said that they had enough investor/lenders at the time I asked so I never did it.

Perhaps, maybe, not sure, but maybe the behavior of the coins in question (not split up and then recombined like most coins) indicates the hacker is one of these people who directly lends their BTC for mixing?  If so that is a finite pool of people.  But, a list of the "investor/lenders" would be difficult or impossible to come by.

After lending BTC to Bitmixer.io for a period of time the lender could then withdraw their BTC and get back different (so mixed) coins plus interest.

How did you know that thunderjet posted something about your wallet?
Did you follow this thread or was you pm'd by thunderjet or somebody else?

I'll answer that. It was I who PM'ed Burt to give him a heads-up on TJ's post. I later informed TJ that it was I who brought it to Burt's attention.

Please don't read anything nefarious into the chain of events.

[Cryptcracker]

This scam wouldn't have been so easy to pull off if it wasn't for bitcointalk.org and Theymos facilitating the whole thing.

[suchmoon]

This scam wouldn't have been so easy to pull off if it wasn't for bitcointalk.org and Theymos facilitating the whole thing.

Is this the 4th dispatch? CIA not involved any longer?

[Gleb Gamow]

This scam wouldn't have been so easy to pull off if it wasn't for bitcointalk.org and Theymos facilitating the whole thing.

"People... What a bunch of bastards!"