Frozen Bitcoin Exchange Cryptsy Goes Down Without Notice

Cryptsy is offline after its server physical location has been surrendered to its court appointed receivership.

Despite all the promises of recovering funds and opening more wallets for withdrawals, it now seems that Cryptsy might be gone for good along with the funds that clients were holding there. If you have been following the news this should not be too surprising after earlier this month a US court ordered an asset freeze against the Florida-based cryptocurrency exchange.

In keeping with its track record of low transparency, Cryptsy did not provide any warning before taking the site down or leave a notice on the site explaining the situation. The last tweet that the firm put out was from two weeks ago acknowledging that its internet and wallet server physical location has been given to its receivership representative along with information on Bittrex held funds.

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Background

At the beginning of the year Cryptsy was hit with a class action lawsuit by account holders that had been denied access to their accounts and were unable to withdraw. The exchange’s head, Paul “Big Vern” Vernon, later claimed that the reason was a cyber hacking attack that stole about $6 million worth of cryptocurrencies from Cryptsy.

The lawsuit was amended recently to include Big Vern’s ex-wife, Lorie Ann Nettles. According to the amended lawsuit the couple bought an expensive house in Florida and then divorced with the apparent goal of protecting their assets in case of any lawsuit even before the exchange announced the hacking.

In March, Big Vern also offered some hope for affected clients as the exchange publicly released a “Reward Contract” with an anonymous hacker that goes by the alias Cryptcracker to recover the stolen 13,000 Bitcoin from Cryptsy for about 13.5% of the recovered amount. But after time has past without any update, it seems that if this was ever a possibility it will no longer make a difference as the court has now taken the assets of the firm off his hands.

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