It wasn’t any old exchange. Like that charming friend who was also deceptive. Then, suddenly, the rug was pulled out from under your feet. When you least expected, it snatched the rug right out from underneath your feet. Click to see.
Imagine that you’re in a bustling market, with coins jingling from your pocket and your eyes darting around the vendors. Cryptsy appeared as the shiny, new stall in 2013, promising great deals with a wonderful assortment of alternative coins. It started out as a very promising venture. Like a hero from an epic story. But it disappointed us all at the end.
Paul Vernon – also known as Big Vern – was the founder of Cryptsy. The exchange was a huge success as it supported several lesser-known cryptocurrency. It was the darling among the crypto community for a short time. Vernon basked on the limelight as traders were enticed to its offerings.
In one moment, users were happily exchanging their digital currencies. The next, poof. A panic was created when funds started to disappear. The exchange fell apart quickly. The bright picture soon turned into an unimaginable nightmare. Many users are left wondering what happened and cursing themselves.
Rumors were flying around like leaves on a windy day. Snipes about inside jobs, shady transactions, and hacking began to circulate. Vernon went missing in early 2016. Play the dramatic soundtrack. It felt like an old-fashioned whodunit with all the fingers pointed but no answers.
When investigators dug deeper into the story, they discovered that a hacker may have been involved in 2014. You’d assume that such an event would have garnered headlines at the time, right? Wrong. It was wrapped up in silence like a secret hidden beneath layers of deception. Vernon claimed Cryptsy has been hacked. Funds totaling $5 million have been taken. It gets more interesting: many think the hack story has been a convenient coverup.
Vernon’s lifestyle was found to be quite different from the miserable life he presented. He lived the high life while the users were left penniless. This entire saga reeked of fishier than a sea food market. It was clear that the funds lost weren’t simply stolen by hackers. They could have been pocketed.
Cryptsy’s ending became a cautionary account in an ironic turn. Vernon was hit with lawsuits and even the U.S. Department of Justice got involved. However, by that time, the damage to the crypto world was already done. Cryptsy came to be associated with distrust and betrayal within the crypto community. Not every golden opportunity is real. In fact, it is more likely a golden-painted rock.
A second layer of this tragedy was the vulnerability in the early crypto eco-system. Regulations were like the ghosts of old – intangible, vague and frequently non-existent. Cryptsy’s downfall brought much-needed awareness. Users started to demand better safeguards, greater transparency, and improved oversight. The wild-west of cryptocurrency began its slow transition into a more controlled space.
Enough with the gloom. Let’s take a step back and be realistic for a while. Cryptsy reminds me of the irritating story that your grandparents would tell to you every time they wanted to teach you some lesson. This is a story we all know. This infamous example is a warning to always remain cautious, sceptical and, when necessary, paranoid. It is safer to be cynical and cautious than sorry in the crypto sands.
We’ll never forget the shady tales of crypto folklore, or the lessons Cryptsy taught. If you plan to invest or trade in crypto, put on your detective hat and trust but verify. And never forget about the mysterious case of Cryptsy.