Cryptsy was a good website once upon a time, somewhere. It was like a digital bazaar down a side street, generally a bit crowded and scruffy. This website received a lot of focus in 2013 because it’s selection of cryptocurrencies. The coin might have been available on Cryptsy. Everyone who was eager to discover the next lost treasure flocked to the site looking for gold. The fees seemed fair. The dashboard was functional, if a little clunky. For a time, traders swapped Bitcoin, Dogecoin, Peercoin and a few other even less well known altcoins with something like wild glee. recommended reading
Security was not, we shouldn’t sugarcoat it, great. You would encounter reports of slow withdrawals or customer service responses that vanished if you perused user forums. That kind of doubt which makes you double check before you hit submit. But the dizzying array kept the money coming and the dealers returning.
Then 2015 came. Some eagle-eyed clients noticed that their cash was languishing in “pending” hell. No ETA, no reason. And online, discussion in chatrooms shifted from chit chat about their favorite coins to morosely imagining what happens next. People would say, “Did you get your coins out?” 17as anxious neighbors after a storm.
Paul Vernon, a k a “Big Vern,” was at the helm. Some people said that he was a visionary in cryptocurrency, others that he was steering things toward an iceberg. As the whisperings mounted, Vernon kept insisting that everything was okay. Spoiler: it wasn’t. When people woke up in January 2016, they discovered that their accounts had been locked. Blocked withdrawals. Are there any balances? Stuck in limbo.
Cryptsy has in fact been permanently misplacing coins without anyone realizing. A hacker made off with millions of dollars. Subsequent investigations suggested that it may have in fact been an inside job. About 13,000 Bitcoins just disappeared. It’s as if your apartment sprouted legs and disappeared while you were at the store. Once the legal issues were resolved, there was no money and no trust.
There was sadness, and there was fury and memes across social media. Friends vowed they wouldn’t go searching for altcoins again. There were many lawsuits, but your chances of getting your coins back were as small as a hair on a frog’s back. Vernon vanished without a trace. There were just a few clues left: rumors, screenshots, half-finished ideas.
Folks who have been in the game for a while still talk about Cryptsy, which is a cautionary tale that comes up any time some newb says, “Is this exchange safe?” These memories still shape what we do. Verify Exchange’s Reputation Again, Lock Coins in Personal Wallets, Remember History Repeats Again
Was it all greed, bad luck or madcap management? It might be a messy mix. Cryptsy made a mark. It made those who wanted to get rich be more careful and pushed crypto communities to be more responsible. When you second-guess the security of an exchange, you’re paying silent homage to the Wild West, which died when Cryptsy folded.