Class Action Lawsuit Against Bitcoin Exchange Cryptsy

Anonymous user of the controversial bitcoin exchange Crypsy known as Thrillhou has filed a lawsuit against the Cryptsy team, for allegedly manipulating cryptocurrency accounts, user funds and illicit use of personal information including the Social Security Number (SSN) of users.

“About this time, I was also receiving private messages about Cryptsy using account verifications as phishing material, and I had personally been told by Cryptsy that they thought my SSN was incorrect, revealing/strongly suggesting/indicating their attempt to use my SSN illegally,” Thrillhou stated on a forum.

However, over the past few months, the exchange has received an increasing number of complaints from users on bitcoin forums including bitcointalk and bitcoin reddit.

Cryptsy users including LeChatNoir, ThrillHou, and Kn_os experienced similar problems with their accounts – the Cryptsy tech support team asked their users to change the passwords of their accounts every time it was “inaccessible.”

The Cryptsy team told users that the accounts were locked due to security maintenance and checkups, while manipulating cryptocurrency accounts without notifying its users.

“As you can see earlier in this forum, BitJohn asked me to “be cooperative” and solve the problem out of public eye…. Since then, they have forced me to password reset no less than 3 times, and then randomly locked me out of the same password which they forced me to reset to. So, in other words, they repeatedly change the password behind my back in an endless cycle without notifying me, and then pretending it is a “server issue”,” Cryptsy user by the account ThrillHou wrote on the thread.

The user took a step further and took the matter into the hands of his attorneys. As soon as the user filed a lawsuit and put all of its credit cards, bank accounts and financial accounts to freeze, Cryptsy support who goes by the online alias BigJohn, John Doe II and John McPherson abruptly stopped assisting the user in recovering his funds and account.

“My Attorneys recommended I file a complaint to the FBI’s internet crime center at : . I’ve gotten some messages about Cryptsy’s use/selling/ phishing of info in the process of “verifying” users, and I personally haven’t received junk mail in the past 10 years or so until the month after I gave Cryptsy my home address. Also, Cryptsy complained in an early support email that my SSN wasn’t correct, indicating that Cryptsy tried to use it in an illegal manner. I’ve since put on my credit security freeze, and informed my attorneys about the articles and rumors regarding Cryptsy’s purported violent/terrorist connections,” ThrillHou explained further.

As the complaints on bitcoin forums and communities began to surface, BigVern, employee of Cryptsy announced on Twitter that BTC withdrawals have been stopped due to the blockchain malleability issues.

The Cryptsy team claimed that the malleability attack led to a database corruption which stopped all fund withdrawals.

“We did and on occasion still do have technical problems that occur but generally we try to fix them as quickly as we can as they come up,” Cryptsy told Joseph Young in an exclusive interview.

“Please also note that the user ThrillHou stopped responding to that thread when his account was fixed by simply resetting his password on Oct 13. The rest of the posts after that are obviously just fudsters and drama queens with no involvement,” the team added.

Cryptsy was unable to process larger “larger” withdrawals mostly for accounts that hold more than 10 BTC due to some technical problems. According to a screenshot submitted by a Cryptsy user on Reddit, the user’s fund have been frozen for the last 48 hours.

Another group of former Cryptsy users expressed their concerns over the customer service of Cryptsy, claiming that the exchange detailed 10 BTC for 48 hours, until the users threatened the exchange to make the issue public.

  • Tom

    Hello Joseph. Do you have any proof of the lawsuit filings? Name of attorney, what state and district court they were filed in, Date filed ect? Without any of that info this article is just FUD. I except better from newsBTC

  • John Russo

    For the most part I tested Crypsty with a small trade on 11/29/15. I figured that some of the highly negative comments might not be true and put it to the test. As of 11/29/15 I have tried to withdraw a sum of .27 BTC and have no luck as of yet, this being the 3rd day of the withdrawal in a pending state. I am giving Cryptsy a chance to redeem itself. As for most part if a 3 plus days of holding funds will make Cryptsy as a trade platform “useless”. I have all correspondence and ticket nos. for anyone’s review. This is available for anyone to review upon making a request on my Facebook page. I let Crypsty’s actions be the sum of their character.

    • As a previous old timer with them, I decided to test for myself too. Sent them $10 of BTC, used it to buy a few litecoins, set up a withdrawal…..and it’s forever pending. They can keep my $10, just sad to see them fall so far. If they were truly having problems they should be upfront about them, now I just consider them to be another set of scammers.

  • m4d3l

    On cryptsy canadien website, all canadien fiat withdraw is blocked and fund not returned to user.

  • John Russo

    I have received further communication in regards of my withdrawal of BTC from Cryptsy. I was asked if I wanted to cancel the pending withdrawal. I advise anyone with a pending withdrawal not to cancel the transaction. It will give Cryptsy unfettered access to your BTC if it is cancelled back into “their” wallet. As with most withdrawal problems I have encountered in BTC the pool, exchange..ect was able to process the BTC manually. Yet Cryptsy can not?

  • Horus

    I will have the cease and desist letter sent to you within a day or two here. There was no class action filed, it was someone in a forum.

    • Moɹlp

      Your exchange is trash. Your customer service is horrific. I couldn’t get a VERY BASIC issue corrected. I think her name was Sarah. Complete idiot.

      I can’t wait til Cryptsy cease to exist.

    • Seriously?

      How about instead of sending out threatening letters you just get your customers some coins within the next day or two? You guys are just sitting around sending out letters, how about you do something to fix your site instead?!

    • fav

      well met

  • Horus

    Also, a support ticket is not ” an exclusive interview” This is shoddy reporting at it’s finest.

    • Seriously?

      You have time to sit here posting comments but you’re too busy to pay out the 5 million worth of coins?! Your mods have time to sit around abusing the banhammer but they’re too busy to tell the customers anything. It’s like a slap in the face to your customers.

  • Rootdownfm Allmusicradio

    I was unable to withdraw any BTC from Cryptsy for 4 weeks. I had withdrawal of 5 btc “pending” for 20 days . I tried ever decreasing amounts and eventually got 0.02 out in btc! I sold out for DOGE and was able to withdraw that in 1m chunks OK – lost some on the trades though. Support were pretty useless – just stock messages. They have certainly lost my trust and my business.

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