Cryptsy first announced it was insolvent on 15th January after months of withdrawal problems, a situation it, until recently, blamed on technical issues. The insolvency disclosure followed on the heels of a class action lawsuit filed in federal court by Florida law firms on behalf of customers.
Since then, the exchange has opened up some of its wallets, allowing customer withdrawals in alternative cryptocurrencies. Market trading and deposits remain offline at press time, according to an announcement on the site’s main page.
Yet, last week’s disclosure raises questions as to why exchange customers weren't told about the true nature of the problems at the exchange.
A Freedom of Information Act (FOIA) request filed by CoinDesk points to reported withdrawal problems dating back to early 2014. Some critics have suggested that exchange itself may be behind the thefts.
In new comments, CEO Paul Vernon reiterated the exchange’s earlier statement that it kept the information hidden to prevent "a panic".
Vernon told CoinDesk:
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Since the funds were not moving, we thought it may be possible to get them back. We did not want to cause a panic with the users, especially if we were still able to fulfill withdrawal requests.
Vernon said that customers were allowed to continue making deposits despite the insolvency problems because "we were continuing to try and find solutions" to the issues, steps that he said included a reduction in operational costs.
Similarly, he said that customers were told the withdrawal problems were technical in nature in an effort to stem any added controversy or concern.
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Any other reason would have caused a panic,
he said.Read more http://www.coindesk.com/cryptsy-bitcoin-theft-avoid-panic/