Once upon a time in the nascent days of cryptocurrency, there existed a service called Cryptsy. It wasn’t glossy or polished — more like a thriving digital bazaar that was hidden away down the back alley of the internet. Its huge array of altcoins gained it massive traction in 2013. If you were chasing a hard-to-find digital asset, Cryptsy probably had it. The site appealed to prospectors seeking the next big breakout coin. The trading fees were reasonable, the interface worked if not well, and amateur traders eagerly exchanged Bitcoin, Dogecoin, Peercoin and a deluge of little-known tokens while dreaming of getting rich on high-risk bets. article source

But let’s not mince words: There was a lot wrong with Cryptsy, particularly in terms of security. Complaints of slow withdrawals and disappearing support messages abounded on online forums. That nagging sensation of doubt would start to undermine everything you posted. Yet the large coin offerings kept the engine running and traders coming back.

And then there was 2015, when things started to go very wrong. Some users found their withdrawal requests frozen — described as “pending” with no progress or timeline for completion. The chatter in public areas became less hype and aspiration and more worry and conjecture. The new standard query was: “Could you get your coins out?” —a digital after-echo of panic in the wake of a disaster.

Leading the way was Paul Vernon, more commonly known as Big Vern. Some considered him a pioneer of crypto, others a ticking time bomb. As things got worse and people became more skeptical, Vernon continued to claim that there was nothing to be concerned about. But in January 2016, users found themselves in a nightmare: accounts locked, withdrawals disabled and balances coming up missing in a slack space.

Behind the scenes Cryptsy had been bleeding for a while. A hacker — perhaps someone who worked for the company — had stolen millions. Later reports would confirm that approximately 13,000 Bitcoins disappeared. You come home and see your house has legs and walked away. That’s how surreal it felt.

It was too late by the time the lawsuits started. The money was gone, and so was the trust. Social media was awash with disbelief, outrage and dark humor. Many swore off altcoins altogether. Lawsuits proliferated, but the odds of recouping lost money were slim — about as slim as hair on a frog. And then Vernon disappeared from public and all was left was random hearsay, screencaps, and us speculating.

Even to this day, in a sense, Cryptsy still serves as a warning to the rest of the industry. Whenever someone says, “Is this exchange safe?”, the ghost of Cryptsy rises. Its tale is a cautionary one that continues to guide how veterans exist in the industry: Be wary of your platforms, move your funds to a private wallet and remember, history tends to repeat itself.

Was the failure driven by greed, incompetence or simple bad luck? Or some kind of messy cocktail of all three. Still, Cryptsy left its mark. It stretched the dreamers among crypto’s earliest proponents a little skeptical, and it pushed the industry in a direction of more robust accountability. You are, in effect, always admitting to yourself that an exchange’s security is leaving you queasy, bowing your head at the memory of the Wild West age that concluded with the grand Cryptsy nosedive.