Bitcoin exchanges are prone to hacking … … Investors lose money and federal law enforcement not responsive …. What we can learn from this latest debacle ….?
The future of digital currency exchange Cryptsy remains in question following news last week that withdrawals and trading would be put on hold indefinitely and claims from the company it was hacked in 2014. BIIA reported the insolvency last week.
Cryptsy first announced it was insolvent on 15th January after months of withdrawal problems, a situation it, until recently, blamed on technical issues. The insolvency disclosure followed on the heels of a class action lawsuit filed in federal court by Florida law firms on behalf of customers. According to a Cryptsy blog the problem dates back to a hack in 2014.
Since then, the exchange has opened up some of its wallets, allowing customer withdrawals in alternative cryptocurrencies. Market trading and deposits remain offline at press time, according to an announcement on the site’s main page.
In an interview with Coindesk, Cryptsy’s CEO Paul Vernon reiterated the exchange’s earlier statement that it kept the information hidden to prevent “a panic”. He also indicated that since its initial blog post disclosing that the exchange had outstanding liabilities of roughly 10,000 BTC, Cryptsy has posted additional details, including indications that it may consider running the website with losses spread amongst its users or withholding withdrawals for certain coins until trading fees generate additional funds.The exchange indicated that it “may take some time” before customers are fully refunded. In its initial blog post detailing the hack, Cryptsy indicated that it had reached out to federal agencies regarding the hack and the stolen funds, but did not receive a response at the time.
Source: Coindesk
