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Author Topic: WARNING ABOUT CRYPTSY  (Read 2387 times)
bitdigger2013
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September 02, 2014, 03:00:39 PM
 #1

I want to warn people about Cryptsy.com. I have been having major problems with them and I am not the only one. For over 4 days now I have not been able to make withdrawals of BTCD coins. They get stuck pending. When I contact support I get simple mail saying we are having some issues and there could be some delays. After trying to get more info on chat room I keep getting some users who accuse me of creating FUD about cryptsy. Funny enough I tried to make smaller withdrawals (5-20 coins) of btcd and those get processed right away, until I reached a total of 55 coins then even 25 coin request gets stuck pending. I then went back to chat and stated this including a remark that said " be very careful about cryptsy this brings back flashback of MTGOX " within seconds I get banned from chat for 1 year!!! One thing for sure I am not trying to spread FUD but I do want to let people now what is going on because cryptsy is being everything BUT transparent which is very troubling when you have funds stuck there and can't get them out for days on end. I don't know if this is just plain POOR customer support and there are true technical issues (for quite some time now) or if there are underlying financial issues...all I know is when I made some noise about it I get BANNED from letting people what is going on.

Copy of part of a chat session where I got banned:

I am still having major problems with BTCD
bitdigger2013361
larger withdrawal staying pending
bitdigger2013361
small withdrawals get processed
bitdigger2013361
until I reached 55 coins then even small withdrawals get stuck pending
bitdigger2013361
MTGOX flashback....be very careful now with cryptsy
AMDchi1d
@bitdigger2013361: be careful doing a bunch of small withdrawals one after another. You may notice that coins get Double Spent... Keep Track.
JShock
NOTE: Old BTC wallet is now operational again and if you have a pending deposit or withdrawal it should process shortly
*** System Message ***
bitdigger2013361 has been banned from chat for 1 year
fitamp511
LOL
thewebshaun
wow! one year! holy moley
JShock
Stop fudding our chat with your BS
johnnyzarku
WOW
Krichwins
Lmfaooo harsh
thewebshaun
well, he has been going on all night
thewebshaun
and now today
Selin366
@JShock: should mention he right about btcd, withdraw do not procced :| and you can't fix it for week
Selin366
@JShock: fix problem or write at twitter explanation and people stop fudding :|
JShock
yes, but purposing trying to drive users away from cryptsy in our own chat room is a no no
Krichwins
Lmfaoooo
blundertoe
be nice if wallets could be up and running im guessing it will be days more for Tek
JShock
The wallets are being upgraded with added security, itys been posted for two weeks now that we are goijng through them..
Krichwins
@blundertoe: are u still winnin?
JShock
We hope to have all wallets 100% operational by weekend
Selin366
@JShock: your guys never give people list of coins which involved. we always have to find it self AFTER we deposite or try withdraw it realy annoying
blundertoe
wow so fast
JShock
@Selin366: we have sent twitters

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bitdigger2013
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September 03, 2014, 03:09:49 PM
 #2

Still pending withdrawals...no communication from support.
BitCoin Operated Boy
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September 27, 2014, 11:34:04 PM
 #3

It's not FUD.

I have been waiting for my withdrawal of BTCD for over 24 hours already. I submitted a ticket and got a reply that they contacted technical team.
They obviously do it deliberately. They must use our coins to trade.

I started using Cryptsy few days ago and I will never use it again and warn everyone.
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September 28, 2014, 01:03:06 AM
 #4

They obviously do it deliberately. They must use our coins to trade.

That seems unlikely. As far as I know they don't prove that they physically control all the coins in their orderbooks, so they don't *need* your coins to trade. They can just make up coins, fractional reserve style.

I'm not saying that nothing shady is going on, just that it's unlikely to be that they're trading with your coins.

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BitCoin Operated Boy
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September 28, 2014, 12:30:27 PM
Last edit: September 28, 2014, 04:48:28 PM by BitCoin Operated Boy
 #5

They obviously do it deliberately. They must use our coins to trade.

That seems unlikely. As far as I know they don't prove that they physically control all the coins in their orderbooks, so they don't *need* your coins to trade. They can just make up coins, fractional reserve style.

I'm not saying that nothing shady is going on, just that it's unlikely to be that they're trading with your coins.

Regardless, they are obvious manipulators. Haven't received neither my coins nor reply to my ticket.
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September 28, 2014, 04:17:49 PM
 #6

i had problems with them too in the past, im avoiding them
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September 28, 2014, 04:42:05 PM
 #7

Flawless for me so far. When I did have a problem logging in I contacted them and they replied within an hour.

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BitCoin Operated Boy
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September 28, 2014, 04:48:05 PM
 #8

Flawless for me so far. When I did have a problem logging in I contacted them and they replied within an hour.

They replied within an hour:
"Thank you for contacting us!

We apologize for the inconvenience. I have reported this issue to our technical team. I will update you soon as your withdrawal transaction has gone thru. Thank you for your patience.

Sincerely,
Gretchen"

Then I have not heard from them since. It was almost 42 hours ago.

They obviously do it deliberately. They must use our coins to trade.

That seems unlikely. As far as I know they don't prove that they physically control all the coins in their orderbooks, so they don't *need* your coins to trade. They can just make up coins, fractional reserve style.

I'm not saying that nothing shady is going on, just that it's unlikely to be that they're trading with your coins.

They can't just make up coins out of thin air like Fed, because it isn't possible due to how the cryptocurrencies are designed. They may, although false bot sells/buys in their trade.
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September 28, 2014, 05:00:52 PM
 #9

They can't just make up coins out of thin air like Fed, because it isn't possible due to how the cryptocurrencies are designed. They may, although false bot sells/buys in their trade.

Oh yes they can. Remember MtGox? Everyone was trading btc that didn't exist.

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September 28, 2014, 05:03:43 PM
 #10

Best place for your coins are on your persons.
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September 28, 2014, 05:14:03 PM
 #11

received some coins around 0.75 btc within 2 minutes. No problems with crypts so far
dooglus
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September 28, 2014, 05:22:57 PM
 #12

They can't just make up coins out of thin air like Fed, because it isn't possible due to how the cryptocurrencies are designed.

You're confused.

They certainly can place sell orders on their orderbook for coins they don't physically own by changing the numbers in their database. Cryptsy trades don't happen on the blockchain, they are just numbers in a database and need not correspond to actual coin holdings. Nobody would know they had made up some coins unless everyone tried to withdraw at once, like happened at MtGox.

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BitCoin Operated Boy
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September 28, 2014, 08:57:56 PM
 #13

They can't just make up coins out of thin air like Fed, because it isn't possible due to how the cryptocurrencies are designed. They may, although false bot sells/buys in their trade.

Oh yes they can. Remember MtGox? Everyone was trading btc that didn't exist.

Yes, because they scammed with bot system.
That's why it all collapsed quickly. They thought they would cheat mathematical laws of nature.

received some coins around 0.75 btc within 2 minutes. No problems with crypts so far

Try to withdraw 100 BTC
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September 28, 2014, 09:09:42 PM
 #14

They certainly can place sell orders on their orderbook for coins they don't physically own by changing the numbers in their database. Cryptsy trades don't happen on the blockchain, they are just numbers in a database and need not correspond to actual coin holdings. Nobody would know they had made up some coins unless everyone tried to withdraw at once, like happened at MtGox.

This is true. Any bank real bank could also do the same. Supposedly there are safeguards in place to avoid it form happening, all kinds of shenanigans goes on in banks anyway, but it's sophisticated and wrapped in fancy catch words and elaborate fine print. The traditional financial market is supposed to be regulated, how effective the regulation is is another discussion entirely.

As for exchanges dealing with cryptocurrencies, there's no oversight whatsoever, so basically you need to trust the exchange operator. If he wants, he can inject any amount of currency in his own systems. For example, if you deposit 1 BTC to an exchange, your account will hold 1.0 BTC. But the administrator of such an exchange could adjust that number to any number he would chose. For instance, he could change it to 10.0 BTC, or 100.0 BTC, or any other number.

As long as trades are only done on the site, this will not be a problem, everybody will be trading, and everyone will be happy.

The problem starts when people wants to withdraw, and there are delays when withdrawing, because the imaginary database coins does not have a sufficient amount of real cryptocurrency to back it up, so withdrawals needs to be supported by new depositors.

Once it gets around that there are withdraw problems, more and more people become sceptical and stop using the site, and because of these news, more and more people want to withdraw their funds, but they can't because it doesn't exist. So the site 'implodes' and a lot of people use money.

There are probably ways to prove your reserves of cryptocurrencies, but if the site does nothing to prove the existance of such funds, as a user you cannot really trust the exchange not to behave unethically or inject imaginary funds to the exchange.

I do think however, that in the long run, the bad actors will be weeded out, like we saw with MtGox. There are many examples in history about companies which are comfortably big and complacent, lose their position and dwindles away, perhaps of unethical behaviour, outright fraud, poor customer service or otherwise. Sometimes such shitty companies survive for a long time, perhaps because there's little competition, but eventuallly they will be replaced.

A good rule of thumb is to never deposit more cryptocurrency to any site than you can afford to lose. Once you have deposited it, it's no longer yours. It's the site that now controls the cryptocurrency that you just deposited, and the only thing that you have is a promise that they will return the funds to you when you request it. If they do not honour the promise, there's not much you can do.

But - we have seen that both Trendon Shavers and Butterfly Labs has faced the traditional justice system, so bitcoin crooks cannot be sure that they're untouched by the law. Bitcoin is not the wild west.

It's also in the interest of an exchange operator to be honest, as this will keep him in business for a long time. But sadly, and unethical operator might get away with the ocassional 'hacked' accounts. Sometimes it could be genuine hacks, other times it could be the exchange stealing the funds themselves.

There should really be some sort of rating site, where all users of an exchange could rate their exchange, and based on this, it would be easier to select a legit exchange.

But to protect yourself, never put all your eggs in one basket. If you have a lot of bitcoins, don't put it all on a single site, and esp. not if you cannot tolerate to lose it all. And with sketchy sites with a poor reputation, don't trade with too much money..

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September 28, 2014, 09:11:55 PM
 #15

They can't just make up coins out of thin air like Fed, because it isn't possible due to how the cryptocurrencies are designed. They may, although false bot sells/buys in their trade.

Oh yes they can. Remember MtGox? Everyone was trading btc that didn't exist.

Yes, because they scammed with bot system.
That's why it all collapsed quickly. They thought they would cheat mathematical laws of nature.

You might be confusing terms here. Bitcoin is 'guarded' by the 'laws of mathematics', however coins on exchanges are most often nothing but database entries, and can be altered by an administrator of an exchange.

received some coins around 0.75 btc within 2 minutes. No problems with crypts so far

Try to withdraw 100 BTC

It could be a sign of cryptsy running with fractional reserves, or it could be that they need to get it from a cold wallet, and that might take some time..
BitCoin Operated Boy
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September 28, 2014, 09:29:36 PM
 #16

They can't just make up coins out of thin air like Fed, because it isn't possible due to how the cryptocurrencies are designed. They may, although false bot sells/buys in their trade.

Oh yes they can. Remember MtGox? Everyone was trading btc that didn't exist.

Yes, because they scammed with bot system.
That's why it all collapsed quickly. They thought they would cheat mathematical laws of nature.

You might be confusing terms here. Bitcoin is 'guarded' by the 'laws of mathematics', however coins on exchanges are most often nothing but database entries, and can be altered by an administrator of an exchange.

received some coins around 0.75 btc within 2 minutes. No problems with crypts so far

Try to withdraw 100 BTC

It could be a sign of cryptsy running with fractional reserves, or it could be that they need to get it from a cold wallet, and that might take some time..

Haven't I just written few times exactly the same?
That they tried to cheat laws of mathematics by using fraudalent bot system and false entries (ala fractional banking but with no limit of deposit multiplication).

Basically, you repeated twice what I already said...
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September 28, 2014, 10:36:58 PM
 #17

Haven't I just written few times exactly the same?
That they tried to cheat laws of mathematics by using fraudalent bot system and false entries (ala fractional banking but with no limit of deposit multiplication).

Basically, you repeated twice what I already said...

You might consider expressing yourself more clearly then. Smiley But then we are all on the same page, and we're all jolly good friends!
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September 29, 2014, 12:18:20 AM
 #18

Haven't I just written few times exactly the same?
That they tried to cheat laws of mathematics by using fraudalent bot system and false entries (ala fractional banking but with no limit of deposit multiplication).

Basically, you repeated twice what I already said...

You might consider expressing yourself more clearly then. Smiley But then we are all on the same page, and we're all jolly good friends!

I'm certainly jolly dumb if I got tricked myself into dealing with Cryptsy :-)
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September 29, 2014, 04:22:00 AM
 #19


received some coins around 0.75 btc within 2 minutes. No problems with crypts so far

Try to withdraw 100 BTC

It could be a sign of cryptsy running with fractional reserves, or it could be that they need to get it from a cold wallet, and that might take some time..
[/quote]I would say it has more to do with trying to take money out of their cold storage of their altcoins. Due to the fact that many altcons have very long orphaned chains (usually due to both short confirmation times and centralization of mining power) they need to wait for a lot of confirmations before spending the coins transferred into their hot wallet from cold storage as they do not want to send a TX that will become invalid due to an orphaned chain (the same is true for "change" sent back to their hot wallet from a TX to their customer

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September 29, 2014, 03:43:39 PM
 #20

There are a few factors that can cause what your explaining:
- Hot wallet runs dry we have dialed down our ratios based on the current environment we prefer the security to the inconvenience. Just the nature of it.
- Password resets automatically force a 24 hour withdraw freeze.
- An account can be flagged for other numerous reasons for review "laws and such" yeah it sucks but its still 1000% faster than if your bank flagged a transaction.
- some withdraws are flagged for a manual release I wont say what causes this as its another security measure, but if it is flagged you can expect a delay until a human reviews it.

So "WARNING ABOUT CRYPTSY" should read Cryptsy has some annoying security features protecting my coins... My reply would then be its the nature of the beast.
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