CEO steals $30,000,000+ worth of Bitcoins, deletes servers full of client data, FLEES to China and starts another exchange!

This is the man behind the massive fraud (13,000 Bitcoins and 300,000 Litecoins) that seems very reminiscent to another large-scale BTC exchange scam, Mt. Gox.

This only gets more and more hilarious as you keep reading. That guy, is the CEO of Cryptsy. His name is Paul Vernon and he ran off with millions of dollars. At the time of the heist in July, 2014 the 13K BTC and 300K LTC were estimated at $7.5M+ and $2.08M.

I used to trade on this exchange a few years back. Hell, I used to use the name of this exchange in my Twitter accounts that I promoted BTC pumps on. We used to love Cryptsy, however after moving out of the cryptocurrency world I completely forgot about it.. until just recently a friend mentioned it to me. I decided to look it up, see how things are.

Oh, what's this?

http://www.Cryptsy.com/ redirects to http://www.CryptsySettlement.com/ hmm... a LITTLE bit strange!

Let's take a look, shall we?

Oh that's a fantastic greeting! GREAT PR!

"The class action lawsuit claims that:

(1) Defendant Project Investors, Inc. d/b/a Cryptsy (“Cryptsy”) and Paul Vernon (“Vernon”) stole and converted for their own use the cryptocurrencies of the Cryptsy account holders;

(2) Defendant Lori Ann Nettles (“Nettles”) was unjustly enriched as a result of assets that she received that were purchased with the proceeds of cryptocurrency taken from the Cryptsy account holders during her marriage to, and in her divorce from, Vernon; and

(3) Defendants Ridgewood Investments, Inc. (“Ridgewood”) and Kaushal Majmudar (“KM”) were unjustly enriched as a result of consulting fees they received from Cryptsy."

Cryptsy had 2 Class Action Lawsuits filed against it. At first Paul Vernon denied any wrongdoing and blamed the loss of coin on an attack. He acted like everything was going to be fixed, even going as far as recruiting hackers with a reward of 1,750 BTC to retrieve the coin. Too bad it all went into his pockets, or at least a majority of it. I think AMERICAN GREED should do a show on this guy next. He's almost as good as Mark Karpeles!

Remember Mark? Stealing hundreds of millions of dollars worth of BTC, chillin' in Japan, spending money on prostitutes? Yeah, there we go! Markey Mark! WOOOOOO!

Here he is engaging in a friendly conversation with one of his clients, sippin' on a Frappucino:

Anyways, so what ended up happening with Paul Vernon was basicalllllly, after he saw the grip tightening around his neck with police involvement, he decided to pack his bags up. He just disappeared, until one day some people were able to find out lo and behold, he's in China! And you wouldn't believe what he's been working on, BiteBi9!

My favorite response on BTCTalk: "very strange ... it is very similar to cryptsy" - CoinMax86

Some people suspect he moved to China along with his girlfriend who he was hiding from his wife for a year. His wife was left behind in the States, already in hot water for trying to fake divorce papers with Paul Vernon over their $1.5MN mansion. By the way, for those of you wondering, there is no extradition treaty that would help bring Vernon back over to the States. That's why China is a country some may look into when planning their escapes.

“One of the more notable elements in the report is the allegation that, in April, either Vernon or someone acting on his behalf, moved to delete critical information from servers tied to the company. Sallah went on to write that, as a result of the destruction of evidence, the primary method for identifying how much certain customers are owed is now gone, a development that is impeding the reimbursement process.”

Currently things are still being drawn out for Victims, as millions of dollars are still missing. Some portions have been recovered, however it may still be possible that Paul Vernon is holding onto some Coin in some wallets where it could be growing in value. BiteBi9 is down, but maybe there's another exchange up somewhere.

Could things have been prevented? Well, if there's a lesson to be learned, let it be this:

“Before the alleged hack, Vernon says, the company had first-year revenues of close to $3 million. During that time, from May 2013 to May 2014, he says he paid himself $1.1 million "via the regular payroll system, base salary + quarterly bonuses.”

Peter Thiel, from Paypal, recommends a salary of about $150,000 or less if a startup company has around $1,500,000 or more in seed investment or capital flowing through its veins. Paul seems to have taken Peter's advice and jacked it up a few notches. WOOPSIES!

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Credits:

http://www.coindesk.com/cryptsy-bankruptcy-millions-bitcoin-stolen/
http://www.miaminewtimes.com/news/cryptsy-founder-paul-vernon-speaks-out-about-millions-in-lost-customer-funds-8568540
https://btcmanager.com/
http://www.bitcoinx.com/