Crytpsy Considers Its Options Following Major Hack In 2014, Offers 1000 BTC Bounty

Cryptsy, a digital currency exchange, has finally come out in the open explaining what ordeal it is facing and options it is left with.

In a blog post, the company said that in a hacking attempt in July 2014, it lost approximately 13,000 BTC ($7.5m at the time) and approximately 300,000 LTC (then $2.08m). At the time, the company decided to pull from its profits to fill the affected wallets over time, given its strong financials. However, the story changed following an article from Coinfire that had several “false” accusations, the company said.

“The article basically caused a bank-run, and since we only had so much in reserves for those currencies problems began”, the blog post reads.

Cryptsy further said that an attempt was made to report the matter to the Miami FBI, however, they directed the company to report it on the 13C website and has not received any response yet.

“Trades and withdrawals will be suspended on the site indefinately until some sort of resolution can be made”, it added.

As such, the company said it is left with options that include – shutting down the website and file bankruptcy; somebody else purchases and runs the company while also making good on requested withdrawals; or if the stolen funds are somehow re-acquired, then the company allows processing of all withdrawal requests.

The company also pointed out that the stolen Bitcoins have not moved once since the hack, giving rise to the possibility that they can be recovered. Cryptsy is offering a bounty of 1000 BTC for information which leads to the recovery of the stolen coins.

In addition, it also said that many users are suggesting the company to spread the loss to all users in the system and allow trades to continue; restrict withdrawals on short balanced coins, allowing withdrawals on a first come, first serve basis upon availability; place existing user balances of BTC, LTC into a frozen state and release funds as they become available from fees collected; or find an investor or group who wish to invest into the operations or provide a loan.

“I’m seeking known leaders in the [bitcoin] community who want to participate in an advisory board on how we can keep Cryptsy operational for the users”, CEO Paul Vernon said.