CRYPTSY stopping withdraw locking accounts without notifying users! Class Action

[Gleb Gamow]

BitJohn's post quoted at least once by some other here: https://bitcointalk.org/index.php?topic=1173703.msg13570195#msg13570195

July 20, 2014, 06:44:59 PM

, didnt went through until the pumping/dumping was over,even when confirmations were 4-5x of required amount.

This happened a couple times and was completely related to an overwhelming number of deposits to a single threaded wallet. We have new systems that better handle this now but many altcoin wallet just cant handle that many inputs in a block. DOGE for instance would have 200 inputs to our wallet every time it found a block which with DOGE is very fast. Any fast block time coin has this issue.

Also, i have seen that many times certain coins get bought off insanely on other exchanges, and then cryptsy adds them the next day.. pure inside info trading,shamefull

We do competitive adds meaning other exchanges have high volume we will add the coin http://www.cryptocoincharts.info/v2/coins/info I would not call using that site insider trading.

Just stay away, its a shady site, useless support and questionable admin.

Keep these things in mind:
- Cryptsy is a public company and is US based with over 40 employees. <All named Sergeant Hans Schultz (check this out: https://www.youtube.com/watch?v=5rpxH_8YqkU (not Hogan's Heroes)> You can drive there and visit: <Not anymore unless you're into getting your rocks off via voyeuring naked offices that's all the rage.>
160 Congress Park Dr Suite 101
Delray Beach, FL 33445
- We are led by our fearless leader Paul Vernon <Interesting usage of "fearless leader".> an actual face you can find at just about any Bitcoin conference.
- We have quarterly audits by a 3rd party CPA firm to ensure existence of funds.
- We have just finished an audit on June 30th <What did the next quarterly audit reveal? Cricketfest was canceled?> for our crytocurrency balances, which is why we held off on launching USD until July 1st. <How much fiat was transferred onto, off of, and now stuck on Cryptsy?>
- We practice stringent security practices which have kept us running for well over a year and a half. <After the event on July 29, 2014, we practiced stringent security practices which has kept us running for the subsequent last year and a half, give or take, mostly taketh.>
- We work hard to stay compliant with Federal laws ensuring your funds are not seized. ACAM certified CFO. <To be fair, BitJohn probably didn't mention SARs for fear of catching the swine or bird flu, but forgetting that's a near impossibility given he recently (then) got shots for such prior to his deployment to an Afghanistan war zone a year earlier from where he penned posts espousing, then administering Cryptsy's day-to-day operation.>

Many of the exchanges that have popped up are unknown entities run by shadowy figures outside of the regulations. Common practices I have noted other exchanges running:
- Fractional Reserves <Note to self: Google that neologistic phrase.> to include using customers funds to trade on their markets for perceived volume utilizing site integrated bots.
- Volume numbers that are fictional and fake order books in order to give folks the impression they are bigger or more successful than they are.
      - I have found numerous exchanges reporting volume numbers that essentially state their customers typically put .04 BTC or more per trade that is quite a bit more than BTC-e or Cryptsy per trade numbers
- Collusion <Is BigJohn reading or writing (or both) the Do it Wright Cryptocurrency Exchange Manual?> between groups of coin "developers" to bring coins onto their exchange to move the perceived volume onto. Usually involving bribes.
      - Some exchanges even do this publicly.
- Incredibly unsafe security practices. <Team Horus & Mullick can't protect ALL the exchanges while living paycheque to paycheque.>
      - Complete bypass of security questions. <Do these over thirteen million dollars worth of cryptocurrencies belong to you? If yes, press 1.>
      - No utilization of cold wallets. <BitJohn's speaking about how other exchanges function, not that of Cryptsy.>
      - Major DB vulnerabilities compromising not only wallet but account info. <Anybody wanna go on a phishing trip to Minnesota? Rumor has it that the muskies are spawning.>
      - Addition of coins with no coin code review. <Luckily, a rogue coin with an embedded trojan is no match for an off-line COLD WALLET, ergo this concern is moot.>
- Running outside of the law in countries where its only a matter of time before funds are seized.
      - Several of these companies are based in the EU or the US running outside of compliance laws. <Which explains why the US flag still has 50 stars: Belize replaced New Hampshire when it became its own sovereign nation governed by the force of Satoshi Nakamoto.> Believing these only apply to FIAT. Some completely unregistered.

Anyhow that is my rant Cryptsy does everything we can to stay above board. Bottom line your coin is safe here and we appreciate all of our customers. <Only 9 days later over 13 million dollars leaves Cryptsy to who knows who with nary a well-trained staff of 40 employees the wiser, or if so opted to not wave a red flag proclaiming an event perhaps fearful of their fearless leader overthrowing the US or Canada prematurely.>

[1714898523]

1714898523

[ThePhwner]

In case anyone is curious this is the contract for representation Silver Group is sending out to US citizens/residents who want to be in the class:

http://pastebin.com/b1e6wCpJ

[Gleb Gamow]

SMIS - SUMMONS ISSUED     
Filing Date:   20-OCT-2015
Filing Party:   
Disposition Amount:
Docket Text:   PAUL EDWARD VERNON, REGISTERED AGENT FOR PROJECT INVESTORS, INC. 8656 TOURNIALINE BLVD. BOYNTON BEACH, FLORIDA 33472 SM-15-069166

BitJohn's last post before the divorce filing: https://bitcointalk.org/index.php?topic=1195864.msg12777757#msg12777757

BitJohn's very next post after the divorce filing:

For those that did not know I resigned from Cryptsy.

BitJohn's very last Reddit post: https://www.reddit.com/r/Bitcoin/comments/3pbk88/bitcoin_exchange_cryptsy_may_have_gone_full_mt/cw73tag



Timestamp Wed Oct 21 01:12:45 2015 UTC equates to Tuesday, October 20, 2015, at 9:12:45 PM (EDT - Florida).

BitJohn was 100% inside the loop at Cryptsy from the very first day (perhaps way before) he posted on this forum.

[Gleb Gamow]

There is not anyone in charge of PR used to be my job. I am pretty sure Vern is currently in China which may be the hold up.

7 Days Later

Cryptsy's data center is in Miami it would take Mullick or Paul about an hour or 2 to get there.

[Gleb Gamow]

http://pastebin.com/tFeXaXtM

Doge2BTC131

3 things actually happened. 1. The new tier system on the 21st of Oct.. 2. The wallet server crashed 3. DDOS

4. Paul Vernon's wife, Lorie Nettles, filed for divorce on October 20, 2015.
5. BitJohn resigned.
6. Horus still knows NOTHING!
7. Mullick disappeared:

Company: LNS Electronics (Nicholas Mullesch)
Address: 1255 Northdale Blvd. Nw Coon Rapids Minnesota 55448 US
Phone: +1.6512077897
Email: nicholas.mullesch@gmail.com

[Gleb Gamow]

http://newzz.biz/www/chainexplorer.us

Domain Name: CHAINEXPLORER.US
Domain ID: D50789244-US
Sponsoring Registrar: eNom, Inc.
Sponsoring Registrar IANA ID: 48
Registrar URL (registration services): whois.enom.com
Domain Status: clientTransferProhibited
Registrant ID: B4E0B09C85B268ED
Registrant Name: Nicholas Mullesch
Registrant Organization: Project Investors Inc
Registrant Address1: 771 Cotton Bay Dr E
Registrant City: West Palm Beach
Registrant State/Province: FL
Registrant Postal Code: 33406
Registrant Country: United States
Registrant Country Code: US
Registrant Phone Number: +1.6512077897
Registrant Email: nicholas.mullesch@gmail.com
Registrant Application Purpose: P1
Registrant Nexus Category: C11
Administrative Contact ID: B4E0B09C85B268ED
Administrative Contact Name: Nicholas Mullesch
Administrative Contact Organization: Project Investors Inc
Administrative Contact Address1: 771 Cotton Bay Dr E
Administrative Contact City: West Palm Beach
Administrative Contact State/Province: FL
Administrative Contact Postal Code: 33406
Administrative Contact Country: United States
Administrative Contact Country Code: US
Administrative Contact Phone Number: +1.6512077897
Administrative Contact Email: nicholas.mullesch@gmail.com
Administrative Application Purpose: P1
Administrative Nexus Category: C11
Billing Contact ID: B4E0B09C85B268ED
Billing Contact Name: Nicholas Mullesch
Billing Contact Organization: Project Investors Inc
Billing Contact Address1: 771 Cotton Bay Dr E
Billing Contact City: West Palm Beach
Billing Contact State/Province: FL
Billing Contact Postal Code: 33406
Billing Contact Country: United States
Billing Contact Country Code: US
Billing Contact Phone Number: +1.6512077897
Billing Contact Email: nicholas.mullesch@gmail.com

http://flvoters.com/by_number/1225/32700_nicholas_peter_mullesch.html

NICHOLAS PETER MULLESCH was born 28 February 1989 and he lives (or lived) at 771 COTTON BAY DR E APT 2813 in WEST PALM BEACH, Palm Beach County, Florida, U.S.A. His voter ID number is 122532700. He registered to vote 22 May 2015 and he is registered with no party affiliation. He is listed as White, not Hispanic.

Ironically, Moreno lived/lives at the same exact address and unit number: http://www.spokeo.com/FL/West-Palm-Beach/771-Cotton-Bay-Dr-E/2813

[Gleb Gamow]

Paul Vernon shows up on camera behind Mullick, and Horus, while broadcasting from Canada, was like glowing wishing he, too, were in the company of "Fearless Leader".

Here's the funny part: Of all the dudes depicted above, guess which one is definitely not the thief.

[Hippie Tech]

There is not anyone in charge of PR used to be my job. I am pretty sure Vern is currently in China which may be the hold up.

7 Days Later

Cryptsy's data center is in Miami it would take Mullick or Paul about an hour or 2 to get there.

.. just tossing this up there..

re: Cryptsy 2.0 by BitJohn
https://bitcointalk.org/index.php?topic=1195864.0




Dec 22 2015 - BitJohn did not notice that Speotnoob had quoted the post he was about to delete. xD
https://bitcointalk.org/index.php?topic=826341.0

[garmin]

http://newzz.biz/www/chainexplorer.us

Domain Name: CHAINEXPLORER.US
Domain ID: D50789244-US
Sponsoring Registrar: eNom, Inc.
Sponsoring Registrar IANA ID: 48
Registrar URL (registration services): whois.enom.com
Domain Status: clientTransferProhibited
Registrant ID: B4E0B09C85B268ED
Registrant Name: Nicholas Mullesch
Registrant Organization: Project Investors Inc
Registrant Address1: 771 Cotton Bay Dr E
Registrant City: West Palm Beach
Registrant State/Province: FL
Registrant Postal Code: 33406
Registrant Country: United States
Registrant Country Code: US
Registrant Phone Number: +1.6512077897

http://flvoters.com/by_number/1225/32700_nicholas_peter_mullesch.html

NICHOLAS PETER MULLESCH was born 28 February 1989 and he lives (or lived) at 771 COTTON BAY DR E APT 2813 in WEST PALM BEACH, Palm Beach County, Florida, U.S.A. His voter ID number is 122532700. He registered to vote 22 May 2015 and he is registered with no party affiliation. He is listed as White, not Hispanic.

Ironically, Moreno lived/lives at the same exact address and unit number: http://www.spokeo.com/FL/West-Palm-Beach/771-Cotton-Bay-Dr-E/2813

Minnesota phone number is still active 

[Hippie Tech]

Paul Vernon shows up on camera behind Terrik, and Horus, while broadcasting from Canada, was like glowing wishing he, too, were in the company of "Fearless Leader".

Here's the funny part: Of all the dudes depicted above, guess which one is definitely not the thief.

You meant to say Mullick... instead of Terrick. Right ?

[Gleb Gamow]

Paul Vernon shows up on camera behind Terrik, and Horus, while broadcasting from Canada, was like glowing wishing he, too, were in the company of "Fearless Leader".

Here's the funny part: Of all the dudes depicted above, guess which one is definitely not the thief.

You meant to say Mullick... instead of Terrick. Right ?

With apologies, you are correct. I'm going to correct my post. Thanks, bud.

[spamsucks]

In case anyone is curious this is the contract for representation Silver Group is sending out to US citizens/residents who want to be in the class:

http://pastebin.com/b1e6wCpJ

Im not sure I understand why this is even a thing. With the arbitration clause in the user agreement , and the fact that the money was stolen... what do you possibly hope to get from cryptsy?

[nubbins7]

Paul Vernon shows up on camera behind Mullick, and Horus, while broadcasting from Canada, was like glowing wishing he, too, were in the company of "Fearless Leader".

Here's the funny part: Of all the dudes depicted above, guess which one is definitely not the thief.

The black guy??

[iGotSpots]

Here's the funny part: Of all the dudes depicted above, guess which one is definitely not the thief.

LOL oh my god, this is probably the funniest fucking post I've ever read on these forums

[CryptoNick]

Paul Vernon shows up on camera behind Mullick, and Horus, while broadcasting from Canada, was like glowing wishing he, too, were in the company of "Fearless Leader".

Here's the funny part: Of all the dudes depicted above, guess which one is definitely not the thief.

The black guy??

The Blue Avatar? 

[theweenerdoge]

https://i.imgur.com/0dywsYs.jpg

Paul Vernon shows up on camera behind Mullick, and Horus, while broadcasting from Canada, was like glowing wishing he, too, were in the company of "Fearless Leader".

Here's the funny part: Of all the dudes depicted above, guess which one is definitely not the thief.

The black guy??

The Blue Avatar? 

The Logan?

[CryptoNick]

In case anyone is curious this is the contract for representation Silver Group is sending out to US citizens/residents who want to be in the class:

http://pastebin.com/b1e6wCpJ

Im not sure I understand why this is even a thing. With the arbitration clause in the user agreement , and the fact that the money was stolen... what do you possibly hope to get from cryptsy?

If you could just write a contract that stated... When Cryptsy (or anyone) commits Fraud and perpetrates Illegal activity with users funds, please refer to section 10 paragraph C which states all parties must go through arbitration, then every criminal enterprise could just use this contractual loop hole.

Allowing business as usual after the hack creates the main problem. At that point had they spoke up then Arbitration may still be your only recourse after an investigation that could actually had some results at the time. By involving innocent parties to the breach and allowing others to leave is like a Financial Game of Musical Chairs and Inside info can help friends get out. This is called insider trading but based on fraudulent activity after the fact. Since the exchange should have announced the Hack and the exchange has to halt.  

It had been explained in detail midway through but I understand it is a long thread. This legal action will prove Fraud with all details included from the posts that Gleb, Peon, Spoet and gang have outlined. It is the class action portion since so many people are affected and judgement can be rendered for all at one time. After it is found that Fraud was involved Criminal proceedings will commence.

I attempted to warn people on Cryptsy Chat about the bait n switch on MN2 knowing that it could not hold up to FinCen scrutiny or simple business law for that matter. I was trolled and told to stop whining by Whale or Not and many others. I tried to help the users but got nowhere. I got out based on MN2 and a gut feeling about the seemingly shady dealings with Alts and I got out right after the Raffle of MN2 shares, I had seen enough.

Now MN2 happened a little while before the hack, and only 5000 shares were sold and maybe this could have been a prelude to the hack to bring in more BitCoin to then leave during the hack. Since it would be held for shares payout and stay there for long periods of time. Pretty clever how it all falls into place.

[Gleb Gamow]

http://blog.cryptsy.com/

Some may ask why we didn’t report this to the authorities when this occurred, and the answer is that we just didn’t know what happened, didn’t want to cause panic, and were unsure who exactly we should be contacting.

Hey, Paul Vernon, were you also unsure as to which form to use when you filed Cryptsy's taxes in 2015 for fiscal year 2014 of the July 29, 2014, event which reduced Cryptsy's holdings by over thirteen million dollars? In case you and your CPA were unsure, it's Form 4684: https://www.irs.gov/pub/irs-pdf/f4684.pdf

Instructions: https://www.irs.gov/pub/irs-pdf/i4684.pdf

Losses You Can Deduct

You can deduct losses of property from fire,
storm, shipwreck, or other casualty, or theft
(for example, larceny, embezzlement,
robbery, and Ponzi-type investment
schemes). See Pub. 547, Casualties,
Disasters, and Thefts, for more examples

https://www.irs.gov/pub/irs-pdf/p547.pdf

A theft is the taking and removing of money or
property with the intent to deprive the owner of
it. The taking of property must be illegal under
the law of the state where it occurred and it
must have been done with criminal intent. You
don't need to show a conviction for theft.
Theft includes the taking of money or property
by the following means.

- Blackmail.
- Burglary.
- Embezzlement.
- Extortion.
- Kidnapping for ransom.
- Larceny.
- Robbery.

The taking of money or property through fraud
or misrepresentation is theft if it is illegal under
state or local law

Next question: Paul, were Cryptsy's CPA and Lawyers also unsure who exactly should be contacted with SARs being the most logical first choice followed by every three-letter agency including the FBI where your inside contact bud, Shaun Bridges, was still occupying an office with his indictment not coming into play for a few more months in spite of you alluding to the contrary in your blog post?:

At one time we had a open communication with Secret Service Agent Shaun Bridges on an unrelated matter, but I think we all know what happened with him – so he was no longer somebody we could report this to.

What's ironic, Paul, is that Marshall Long, Leroy Fodor, John Fitzpatrick and Craig Wright's lies are more believable than what you've penned, for even an mentally unstable person can see right through them.

[GoldSeal]

I don't think it's theft. With each passing day, this feels more like embezzlement.

The only good thing is that at least that JudgeDredd douchebag was wiped out by this.

[GoldSeal]

I think we should pass the collection hat and raise some money to fund a small team of private bounty hunters to grab Paul and return him to the US. This happens everyday. It's called "extraordinary rendition". This could certainly be arranged privately.

Anybody interested in contributing? We can probably have him back in the US within a week if we mobilize quickly.