Author Topic: Mt Gox > Cryptsy - Time for BTS?  (Read 3492 times)

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Offline Brekyrself

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Mt Gox > Cryptsy - Time for BTS?
« on: January 15, 2016, 04:51:16 am »
Cryptsy confirms they were hacked.

"These are the approximate figures taken:
Bitcoin:  13,000 BTC
Litecoin:  300,000 LTC"

http://blog.cryptsy.com/


Stealth is nice, but perhaps now is the time to push for pooled BitAssets and liquidity?

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Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #1 on: January 15, 2016, 05:11:38 am »
I lost 20 IQ points reading the Cryptsy blog excuses. Sounds like a time to reintroduce BitShares to the crypto community.

Offline btswildpig

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Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #2 on: January 15, 2016, 05:23:59 am »
I lost 20 IQ points reading the Cryptsy blog excuses. Sounds like a time to reintroduce BitShares to the crypto community.

it will have the same problem if it's IOU trading .
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Offline puppies

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Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #3 on: January 15, 2016, 05:40:59 am »
So.  They kept their bitcoin and litecoin wallets on the same server that they kept their lucky7coin? 
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Offline gamey

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Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #4 on: January 15, 2016, 06:16:37 am »
So.  They kept their bitcoin and litecoin wallets on the same server that they kept their lucky7coin?

Lol yes!  and presumably didn't chroot the coinds etc. I mean getting competent admins isn't cheap, but christ all mighty.

The fact that the wallets were on the same server is sketchy at best.  I mean..  it must have been the cold wallet too ?  BigVern is one sketchy mofo. 
« Last Edit: January 15, 2016, 06:18:18 am by gamey »
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Offline jsidhu

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Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #5 on: January 15, 2016, 06:23:16 am »
So.  They kept their bitcoin and litecoin wallets on the same server that they kept their lucky7coin?

Lol yes!  and presumably didn't chroot the coinds etc. I mean getting competent admins isn't cheap, but christ all mighty.

The fact that the wallets were on the same server is sketchy at best.  I mean..  it must have been the cold wallet too ?  BigVern is one sketchy mofo.
He prob planted the malware in the coin himself
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Offline gamey

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Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #6 on: January 15, 2016, 06:27:15 am »
So.  They kept their bitcoin and litecoin wallets on the same server that they kept their lucky7coin?

Lol yes!  and presumably didn't chroot the coinds etc. I mean getting competent admins isn't cheap, but christ all mighty.

The fact that the wallets were on the same server is sketchy at best.  I mean..  it must have been the cold wallet too ?  BigVern is one sketchy mofo.
He prob planted the malware in the coin himself

bahaha..  I wouldn't be surprised.  The thing to do would have been admit fault, create an asset and give the asset out to the people who lost the funds.  Instead you just screw other people down the road and knowingly do so.

I'd like to see BigVern do time. Taking in money and not being able to pay it back, sounds very close to fraud by a legal definition.
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Offline CoinHoarder

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Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #7 on: January 15, 2016, 07:35:52 am »
Oops, I missed your thread..

TL;DR:
- Cryptsy was hacked
- 13,000 BTC and 300,000 LTC was stolen
- ran for a long time on fractional reserves
- blackmails their users at the end.. pretty much saying "don't light torches to come after crypsty, or you'll never get paid"
- they blame a "libelous article" for being the reason their exchange which was operating on fractional reserves failed...
- all withdrawals and trades have been frozen


http://blog.cryptsy.com

Quote
Cryptsy has had problems for some time now and it’s time to let everybody know exactly why.  These problems were NOT because of any recent phishing attacks, or even a ddos attack, nor does it have anything to do with me personally.
About a year and a half ago, we were alerted in the early AM of a reduction in our safe/cold wallet balances of Bitcoin and Litecoin, as well as a couple other smaller cryptocurrencies.   After a period of time of investigation it was found that the developer of Lucky7Coin had placed an IRC backdoor into the code of wallet, which allowed it to act as a sort of a Trojan, or command and control unit.   This Trojan had likely been there for months before it was able to collect enough information to perform the attack.  It does not appear that this was the original developer for LK7, as on 5/22/2014, we received this message from the new developer who wanted to maintain the codebase:

Hello,
Lucky7Coin is not maintained and I would like to take care of it. I have announced that on bitcointalk.org in Lucky7Coin thread. You’re the only exchange for this coin and I hope you will let me take care of it. I’m responsible. You don’t have to be afraid of errors or forks. I’m developing multipool and I know bitcoin internals and protocol.
https://bitcointalk.org/index.php?topic=295157.msg6861797#msg6861797
For a start I’ve changed irc network, so clients could synchronize blockchain. Please upgrade as soon as you can.
Github repo:
https://github.com/alerj78/lucky7coin
Branch “master” will always be for stable version, branch “devel” could be dirty. In a 2-3 weeks I’ll release new version with p2pool support and checkpoints. Before that I’ll contact you to check few blocks hashes for checkpoints and make sure there is no fork.
I hope we can cooperate and make this coin live again!
Jack

These are the approximate figures taken:
Bitcoin:  13,000 BTC
Litecoin:  300,000 LTC
This of course was a critical event for Cryptsy, however at the time the website was earning more than it was spending and we still have some reserves of those cryptocurrencies on hand.   The decision was made to pull from our profits to fill these wallets back up over time, thus attempting to avert complete closure of the website at that time.   This worked fine for awhile, as profits decreased due to low volume and low Bitcoin prices, we would adjust our spending accordingly.  It wasn’t until an article from Coinfire came out that contained many false accusations that things began to crumble.   The article basically caused a bank-run, and since we only had so much in reserves for those currencies problems began. 
Our current customer liabilities for BTC is around 10,000 BTC, so as you can see we would like to see the Bitcoins returned for both our users and for ourselves.
Here are the transaction details from the Bitcoin wallet:
https://www.walletexplorer.com/wallet/0c07e0bec1002bd2
As you can see,  2014-07-29 13:17:36 is when the event occurred.   A very interesting fact here, however, is that those Bitcoins have not moved once since this happened.    This gives rise to the possibility they can be recovered.   In fact, I’m offering a bounty of 1000 BTC for information which leads to the recovery of the stolen coins.
If you happen to be the perpetrator of this crime, and want to send the coins back no questions asked, then you can simply send them to this address: 
1KNi4E4MTsF7gfuPKPNAbrZWQvtdQBTAAa
If they are returned, then we will assume that no harm was meant and will not take any action to reveal who you are.  If not, well, then I suppose the entire community will be looking for you.
Some may ask why we didn’t report this to the authorities when this occurred, and the answer is that we just didn’t know what happened, didn’t want to cause panic, and were unsure who exactly we should be contacting.   At one time we had a open communication with Secret Service Agent Shaun Bridges on an unrelated matter, but I think we all know what happened with him – so he was no longer somebody we could report this to.    Recently I attempted to contact the Miami FBI office to report this, but they instead directed me to report it on the I3C website.  I’ve not heard anything from them.
I think the only real people who can assist with this are the people of the Bitcoin community itself.
Trades and withdrawals will be suspended on the site indefinately until some sort of resolution can be made.
Here are our options:
1.   We shut down the website and file bankruptcy, letting users file claims via the bankruptcy process and letting the court make the disbursements.
-   or –
2.   Somebody else comes in to purchase and run Cryptsy while also making good on requested withdrawals.
-   or –
3.   If somehow we are able to re-aquire the stolen funds, then we allow all withdrawal requests to process.
I’m obviously open to any other ideas people may have on this.

I feel for all of the people affected, but at the same time I think this is a good time for Bitshares to advertise itself within the crypto community. Let's get people in the cryptocurrency community to take a fresh look at Bitshares.

Let's start here? https://bitcointalk.org/index.php?topic=1328530.0
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Offline EstefanTT

Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #8 on: January 15, 2016, 09:21:06 am »
It would be nice that a respected member of  bitcoin.talk recall in a positiv and frendly way that since octobre the solution is out there, that we should as a community (all crypto community) stop loosing our funds and move together into the decentralised exchange of BitShares.

Even if we are still missing some of the features of poloniex , the Dex is pretty decent right now.

The only prob I see to start attracting crypto traders is the lack of (liquidity off course) altcoins to trade. Is there info somewhere on how/when is it planned to be implanted ?
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Offline wallace

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Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #9 on: January 15, 2016, 09:33:17 am »
Bitshares can fix this kind of Mt Gox issue? the answer is no. for this case, the difference is DEX will never been frozen.

For example, let's try to imagine a scenario when ccedk cold wallet been hacked: their BTC/LTC/BTS... was gone, if you have ccedk issued UIA you will lost money, but if you have already traded the UIA to some other smartcoin or UIA which not belongs to ccedk you will survive. the worst case is that you didn't know about this and you still bought the OPENBTC, OPENLTC.....

so before reintroduce our DEX to other community let's think it twice, what kind of problem Bitshares can fix?
give me money, I will do...

Offline xeroc

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Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #10 on: January 15, 2016, 09:47:49 am »
But .. we have way better means to protect cold storage using hierarchical authorities ..
Whether exchanges use it for their coldstorage is another story though ..
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Offline Akado

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Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #11 on: January 15, 2016, 11:51:34 am »
BitShares is still not ready to deal with this and I urge the community to help come up with the plan. I suggested exchanges having multi signature accounts in order to monitor each other

https://bitsharestalk.org/index.php/topic,20947.75.html

Please give your input.
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Offline CLains

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Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #12 on: January 15, 2016, 03:58:30 pm »
the insanity continues, bitcoin in distress and exchanges falling left and right, bitshares arise

Offline sudo

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Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #13 on: January 16, 2016, 09:53:28 am »
is bts ready ?  bts iou  have the same risk
atom cross trade  would it be possible?
QORA did have it?

Offline Akado

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Re: Mt Gox > Cryptsy - Time for BTS?
« Reply #14 on: January 16, 2016, 12:21:47 pm »
is bts ready ?  bts iou  have the same risk
atom cross trade  would it be possible?
QORA did have it?

Exactly, it's not. Please check the link above and give your input
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