Cryptsy allegations

[Steve Sokolowski]

There are some allegations floating around about Cryptsy not paying out customers at http://siliconangle.com/blog/2015/10/19 ... customers/.

Chris is investigating the truth of the allegations and hopes to come to a decision by tonight. If proven true, then I will ask Chris to determine how much additional profitability Cryptsy is adding to the pool. If it's not much, we would discontinue Cryptsy. If it's a lot, then we could raise fees by less than the value Cryptsy adds, so that we offset the expected value of losses due to a closure while still making customers a little more money.

If Cryptsy fails, we would probably lose about $1000, so we may need to prepare to cover those losses in the case they suddenly disappear.

On the other hand, these allegations seem tenuous at best, with little evidence to back them up, and their representatives have been responding to all of them. Allegations against Cryptsy seem to be a dime a dozen nowadays, and none of them have any hard evidence to back them up. It's possible that Cryptsy's customer service is so poor that people jump to conclusions, as our experience is that it takes a long time for them to reply to tickets.

If anyone, like kires or coinaday, knows anything about whether these allegations are true or not, please chime in.

[loszhor]

How troubling to hear. I'm glad I don't keep that much there. I do hope the rumors are not true.

I would highly recommend that Prohashing start stockpiling emergency funds for future incidents such as this.

[kires]

Sorry, I don't have anywhere near enough data to make a guess one way or the other.

[Some1notu]

I don't put much faith in the OP on bitcointalk thread. I think he finally changed his password like he had been told for days, and got into his account.

The more troubling part is all the people saying they can deposit, but not withdraw. I've been able to deposit, exchange the coins, and withdraw without problems. But there are far too many people stepping forward that can't withdraw and support is ignoring them. Obviously something isn't right.

Whatever you do, never use an exchange as a wallet!

[Chris Sokolowski]

We haven't had any issues with Cryptsy withdrawals recently. We have had withdrawal issues in the past on obscure coins, and Cryptsy has taken a long time to respond but eventually fixed the issues.

I think that people are jumping to conclusions that Cryptsy is intentionally preventing withdrawals. I believe that there are technical issues with these coins, and Cryptsy does not have the staff to resolve them in a reasonable timeframe, leading people to think they are intentionally withholding the withdrawals. There's a reason why Cryptsy is the only exchange that has coins that are perpetually in "maintenance."

We withdrawal money from all of our exchanges every day, so even if Cryptsy failed, we would only lose at most one day's worth of trades at the exchange. This safeguard already proved helpful with Allcoin because when our account got locked and the owner disappeared, we only had 0.1 BTC in the exchange. We weren't like the other Allcoin customers who lost dozens of Bitcoins.

[coinaday]

Hi, I just saw this today.

We haven't had any issues with Cryptsy withdrawals recently. We have had withdrawal issues in the past on obscure coins, and Cryptsy has taken a long time to respond but eventually fixed the issues.

This is basically my experience.

I think that people are jumping to conclusions that Cryptsy is intentionally preventing withdrawals. I believe that there are technical issues with these coins, and Cryptsy does not have the staff to resolve them in a reasonable timeframe, leading people to think they are intentionally withholding the withdrawals. There's a reason why Cryptsy is the only exchange that has coins that are perpetually in "maintenance."

I think this is a reasonable view of it. But the thing is, this "Cryptsy normal" is a major part of the problem in my opinion: given their typical state of disorder and ...understaffing (I'd be tempted to say incompetence, but we'll give them the benefit of the doubt), it makes it difficult to figure out if something worse starts happening.

We withdrawal money from all of our exchanges every day, so even if Cryptsy failed, we would only lose at most one day's worth of trades at the exchange. This safeguard already proved helpful with Allcoin because when our account got locked and the owner disappeared, we only had 0.1 BTC in the exchange. We weren't like the other Allcoin customers who lost dozens of Bitcoins.

I think this is a very good step. I had been holding a lot of various coins on Cryptsy. As a result of the coinfire.io story, which I consider credible, I eventually got all my coins off and now have not a satoshi of value. However, I did consider putting some BTC in to buy cheaper NYAN on Cryptsy while it was lagging behind for a while, but the markets evened up again so it became a moot point for me. My point is that I did consider putting coins in there again with that same precaution, to make sure to get the coins off ASAP. I think until more information comes out, it's a reasonable gamble.

For the long-term though, I don't expect Cryptsy to survive 2016, just my hunch taking a wide variety of factors into consideration. I think it's going to be a bit of death by a thousand cuts, no matter what the final straw may be. I could certainly be wrong.

But the fact that at one point I was overwithdrawn about 6 million NYAN just was disconcerting to me on their competence. My account couldn't withdraw anything else at that point until the negative balance was resolved, and that whole experience significantly damaged my trust with them.

[tradewiz]

I trade extensively on Cryptsy and I do withdrawals all the time, in pretty large size. I have not had any issues. But that is no guarantee for future performance of the exchange, but to me at least they have been completely fine. The article that has been circulating seems to be paid by the opposition, it has very little facts. They changed their KYC so I think its only the level 1 KYC which have had some (but not much) problems.
That said the API and support of Cryptsy are below par.....

[Steve Sokolowski]

Cryptsy recently imposed a $10k/month withdrawal limit for most customers, which is a huge problem for us, given that our trade volume was 48 bitcoins last month at Cryptsy.

We requested an exception, but I wonder if this issue will cause problems for others too, and why they suddenly decided to implement this limit.