Cryptsy: Mt. Gox Junior?

January 6, 2016 13:05 UTC

This writer has received more complaints about Cryptsy since his last story on the subject than he has billing notices. Seriously. Some of them were messages of support, some were further complaints. Most of them had a common theme: Cryptsy won’t let the customer withdraw his or her funds.

Within the last 24 hours, Cryptsy had some serious downtime. Their message was simple and, at this point, expected: “Trade engine and withdrawals paused while we investigate cause of lag. Your patience is appreciated. Thank you.”

Something should be gotten out of the way: with as many dissatisfied customers as Cryptsy has, a distributed denial of service attack is definitely not out of the question. Certainly a cyber attack like that is less expensive than a lawsuit, less time-consuming than going to the government, who reportedly are already investigating Cryptsy in several ways, and more effective at disrupting their business model. For those who believe the exchange is an elaborate scam, it may be considered a public service: if no one can use the site, no one can be scammed by it.

In any case, down to brass tacks: the new complaints. By posting the following information, CCN hopes that our readers will make a responsible decision for themselves. If that decision is to continue to use Cryptsy, do so at your own risk. For several months now, there have been louder and louder complaints that Bitcoin withdrawals are impossible, and further that only certain alternative coin withdrawals ever manage to go through. A recurring theme is that contacting support results in a feedback loop or simply a total ignoring of the inquiry. Those who have the nerve to complain on the site itself, via its chat box, are subsequently banned. (Should also note that this chat box no longer exists, possibly because of overwhelming complaints there.)

For these reasons, this writer and former Cryptsy user can make only one fair conclusion: it is not safe to use Cryptsy. If you’re trading in coins that are only available through Cryptsy, consider why other exchanges are not willing to list them, and base your future decisions on that information. After all, a competing exchange, C-Cex, is known to list even the most out-there coins, for a time, in order to give everyone a fair shake.

Recent Complaints

The following are the most legitimate complaints received. While one can say that these are low amounts of Bitcoin, one should step back and realize what they’re really saying: Cryptsy isn’t even managing to appear able to give up small amounts of Bitcoin at this point, therefore what chance do larger withdrawals stand?

Support don’t want reply to my tickets. Somehow it seems to me that this will be the second MtGox.

While this customer may be impatient, our previous stories tell of how the same thing can go on for weeks. Perhaps this user is used to more professional exchanges which respond to support tickets within a day or so. Also note that this customer is well below the withdrawal limits for even a brand new account, having only two withdrawal requests between the end of October and the end of December.

Here’s another, which we’ve yet to get screengrabs from:

Looking back I should have known better. […] Now have 3.5 bitcoin trappped in  “pending.” Have been able to withdraw other funds via heavily overpriced Neucoin.

Note: CCN is following up with this reader for more information and/or screenshots.

I had withdrawal order for 3,96BTC at Cryptsy and after few days of pending I canceled my withdrawal request. I have more than enough of bad experience with bitcoin-24 and MtGox where I lost 10BTC already and wanted to withdraw what I can and if I can at any cost. All VTC passed without problem (not traded on Cryptsy), all 310 Eth (not traded on Cryptsy) passed without problem, all 4,8 Mio DOGE (not traded on Cryptsy) passed without problem. […]

Then I decided to trade BTC for Eth and to withdraw. I have bought app. 1350 Eth for app. 2,9BTC and initiated 4 different withdrawal requests which passed for my surprise. (3 of them on the same address on which the first transaction of 310Eth only deposited was successful). After two days of expecting the funds to come (not received) I decided to generate new address and to send the last app. 400Eth which was proceeded after long pending.

Then considering my 3,96BTC as lost I bought app. 2.600 000 DOGE with the remaining app. 1 BTC which were immediately sent out of Cryptsy (successfully). […] Finally I checked the transaction IDs of the Eth transactions and guess what – only the first transaction for 310Eth was recorded on the blockchain. All the other 4 Eth transactions with respective IDs and status “Proceeded” [sic] haven’t been ever initiated / recorded in the blockchain.

In this disturbing example, it appears that Cryptsy’s system told our reader that his withdrawal of Ether had been processed, but then gave him false transaction IDs.

More examples exist, but are either less substantial or would add nothing to this story. In our estimation, it appears that Cryptsy has several methods of avoiding processing withdrawals, and that Bitcoin is no longer the only currency to experience issues. Further, Cryptsy fails to address customer complaints in public in any veritable way, and has previously threatened legal action against publications which call them out.

There is also the lingering issue of Mintsy, which we humbly request experienced readers write to us about. There are words on the grapevine indicating that the operation was shut down, customer funds absconded with, and there hasn’t been much buzz about this particular issue.

Whatever is going on, professionalism in handling customer complaints is paramount in an industry where you are essentially trading various forms of digital cash – meaning that exit scams are highly possible. If nothing else (and there is likely much else), Cryptsy is guilty of bad customer service, and this alone has been reason to avoid other crypto ventures wholesale.

So, readers who’ve had experience at Cryptsy, do you still feel safe there, or is it just another failed exchange? Is it possible that Cryptsy lost funds in one way or another, and has yet to recover them, and thus literally cannot pay out withdrawals without updating their books to reflect their losses? If they were more open, would you be more forgiving? Comment below and be sure to share this article far and wide. The Mintsy thing requires some attention, for sure.

Featured image from Shutterstock.

@bitillionaire

P. H. Madore has written for CCN since 2014. Please send breaking news tips or requests for investigation to bitillionaire+phm@gmail.com. He lives in Maine, USA. A single father of four young children, he does not discourage financial donations, provided they do not come with strings attached.

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