Have't you seen the latest interview with one of the Cryptsy founders?They were requesting on the camera to not put this interview in public because they're scared people might start showing up in their office.One of the reasons I feel they moved their office.Its over for me the day I withdraw my bitcoins.If you still have a chance please withdrew your coins.
but why they become insolvent if are free?
Their services are not free, if that's what you mean. You pay each time you make a trade, but I have no idea why they or any other exchange becomes insolvent. You'd think that there's two sides to each trade and an exchanges function is to match buy and sell orders and not to take either side of the trade. Am I totally ignorant??
Although we don't know exactly what's going on with Cryptsy, some possibilities are, in order from least to most scam-oriented:
1. Bad Business Practices: Sloppy accounting, lack of professional standards, poor cost containment. I.e., what happens when an immature person tries to run a company.
2. Bad Trades: In order to make markets, they were taking the other side of customer trades (acted as principal in the transaction). The trades went bad on a large scale.
3. Liquidity problems: They ran into problems settling trades. They ended up with a big inventory of alts that was declining in value.
4. Misfeasance: They "borrowed" from customer accounts to pay ongoing operating expenses, fully intending to pay the customers back. It didn't work out that way.
5. Malfeasance: Assets in customer accounts were expropriated for personal use, possibly with intention of repayment, crossing fingers that they could repay.
6. Ponzi: Despite what was displayed on the website, they didn't really have an inventory of coins. The transactions were faked. When deposits net of redemptions stopped
growing, the music ended, leaving account holders to scramble for chairs (withdraw their coins).
