How Cryptsy can save itself

[Valuntinam]

Can BTC continue to increase in price with issues like these?  Some people will lose confidence in it because of the risks.

Only some 13000 BTC had been stolen from Cryptsy and that's nothing in comparison to the Gox theft. In addition a lot of altcoins also disappeared (2.5k-3k BTC worth LTC, BTCD and XC) what will be dumped for BTC at some point, I guess. Even 13k BTC wouldn't have too much effect on the prices.

13,000 bitcoin is just 4 day supply of bitcoin. It will be absorbed by the market easily. The altcoins are even easier.

But individuals that lost money can't absorb those losses very easily (like me).

how much have you lost?

about 3 bitcoins, for me that's a lot

I lost a few vert coins. It is just about 0.0xx bitcoin. But I still want the money back. BigVern should be punished.

[aardvark15]

I agree.  Even if we can't get any money (bitcoins) back from him, we need to make sure he faces justice through the courts and is punished.

[OtterBoxed]

I agree.  Even if we can't get any money (bitcoins) back from him, we need to make sure he faces justice through the courts and is punished.

That would be nice. Look how long it took for Karpeles though.

[X68N]

I agree.  Even if we can't get any money (bitcoins) back from him, we need to make sure he faces justice through the courts and is punished.

That would be nice. Look how long it took for Karpeles though.

but that fat dude got some rough treatment in japan, i read what they do usually (you are gulity until its proven otherwise...)
he got some japanese justice culture package

Big Vern needs that too.

[HarryKPeters]

I agree.  Even if we can't get any money (bitcoins) back from him, we need to make sure he faces justice through the courts and is punished.

That would be nice. Look how long it took for Karpeles though.

Well yes Karpeles almost doged the bullet but in the end you will see how scammers will be caught.
There is justice, only it takes some time. And although Vern don't seems to be a real crook, he was responsible for what happened at cryptsy

Having such a poor security means he stepped into a game he shouldn't have. And now he will 'pay' for it.

[Nagle]

The US doesn't have an extradition treaty with China. On the other hand, China may decide they don't want to give "Big Vern" permanent residency and kick him out as "likely to cause harms to the national safety and interests".

[STT]

Step 1: "Phantom BTC" credits
Create a new, fake currency called "Phantom BTC", which cannot be deposited nor withdrawn.  Credit all users with Phantom BTC equivalent to their current outstanding BTC holdings and set BTC holdings to 0.  Future BTC deposits will be credited as BTC.

Step 2: BTC to Phantom BTC exchange
Create a new trading pair between BTC and Phantom BTC.  Collect a Phantom BTC commission on every trade.  This means that on every trade the amount of Phantom BTC in existence will decrease.

Step 3: Phantom BTC buyback
Use profits from other trading pairs to buy back Phantom BTC, further accelerating the rate at which it disappears.  If the stolen funds are recovered, all of the Phantom BTC can immediately be bought back.  Eventually there will be no more Phantom BTC and Cryptsy can close that trading pair.

Having a BTC to Phantom BTC exchange will allow pessimistic bagholders to withdraw their BTC at a loss, while allowing opportunistic traders to essentially buy Cryptsy's debt, with the possibility of significant returns when Cryptsy finally gets everything back on track.  Patient/optimistic bagholders can simply wait until a favorable exchange rate or until the buyback.

Sounds like you work in investment banking and yes it would work.  Its a fractional debt system enabling profitable business to continue, so long as the debt financing costs less then the profit the conclusion is repayment and continuation of the previous business.

Its unfortunate we cant manage to do that overall, there is no super whale to step in and restore confidence in trading for this site apparently.    Alot of assets a business has is the intangible kudos and memory of regular trade from so many people.    In the real world its very often a failing or even corrupt system is restored via a transformative takeover, it is risky but the costs of buying such a ruined asset is low and so long as trading does resume and confidence builds it should repay.
  The debt system like said would be an appreciative asset - unlike a pyramid system this is the correct use of mutual benefit and compound gain for investors and positive for those much smaller traders who utilised the site to bridge the gap across multiple small alt coin chains.   A famous example, Warren Buffet 'rescuing' a failing bank. He profited, society gained and backers of the deal also did well
http://kb.trisugar.com/node/12550

   I think its feasible but all these bitcoin fatcats mostly have the idea to just sit there and wait for the price to rise; no economy works like that.   Either collectively useful work is done and bitcoin and other coins describe and enable those transactions or the whole deal is waste of time like a lottery and only the thieves and con artists gain.  Security, debt recovery, junk bonds like this is all normal; failure is normal and work to recover is normal.  Big government bailouts are abnormal, any normal capitalist society must deal with its own trash through loss to profit

[aardvark15]

This is an interesting idea (Phantom BTC).  It is better than leaving everybody with nothing.  The problem is who is going to take over cryptsy to do something like this.  There's no way Big Vern is coming back and I don't think we want him to manage it.

[aardvark15]

I actually had a similar idea.  I think whoever buys the company should give the people that have money on the site Cryptsy shares (shares of the company) equivalent to what they lost.  Then they could set up the shares to trade on the site like the other coins.

[STT]

Was it Poloniex that setup an IOU section when they lost some funds, I forget who but they managed to pull it off.  I think they basically were immediately honest about what happened, its possible it was not as bad a loss in that case as their own systems shut it down mid theft.  Apologies for my bad memory if it was somewhere else

[Nagle]

I actually had a similar idea.  I think whoever buys the company should give the people that have money on the site Cryptsy shares (shares of the company) equivalent to what they lost.  Then they could set up the shares to trade on the site like the other coins.

Why would anybody buy the company? No assets, no brand value, and a CEO on the lam.

[mtnsaa]

I actually had a similar idea.  I think whoever buys the company should give the people that have money on the site Cryptsy shares (shares of the company) equivalent to what they lost.  Then they could set up the shares to trade on the site like the other coins.

Why would anybody buy the company? No assets, no brand value, and a CEO on the lam.

The only way I can think of is that they absorb their debt and build a new company. This will definitely makes them instantly trust worthy but of course, it's a very risky move.

[aardvark15]

If they had all new ownership, I think people would still use their trading platform.  I liked how it worked.  If they gave ownership to users that lost money, they would also instantly have customers as well.

[Gleb Gamow]

Rumor has it that Charlie or Bobby Lee is gonna step in to fill the void. No, not buy Cryptsy, but start their own alt exchange.

[STT]

The only way I can think of is that they absorb their debt and build a new company. This will definitely makes them instantly trust worthy but of course, it's a very risky move.

I think the irony is an entirely new entity will be less trusted and familar to customers.    Alot of people here may swear off ever trusting this place but many are just going there to cash in their chips, no big sums just passing through as a convenience and they'll go back.   Its worth them just resurrecting the crytpsy brand, it will just involve risk for those do put into starting it back up; most customers are small time and hassle of finding something better is a bigger obstacle

[BTCBinary]

There's actually no way that Cryptsy can be saved.
It would be good enought if they were honest enough to return our coins, which i don't believe it won't happen

[BTCBinary]

Well since February that they don't give any feedback. I guess is now safe to say that they have just stoled our coins and there is no way to get them back.

[Oriannaa]

Whats the point on cryptsy wanting to do this though.

If they all lost face from this community, I wouldnt think anyone would want to come back.

It also allows people to just look towards a new face alt coin exchange then a old scum bag one.