Court Documents Reveal That Cryptsy Liquidators Intend To Market Sell Seized Coins
Recent court documents have been published requesting the courts permission to sell digital assets seized from Cryptsy at market on traditional cryptocurrency exchanges.
The recent document made public by JAMES D. SALLAH (court-appointed receiver for Cryptsy investors) has outlined the recovered digital assets and the balances secured. It is alleged that Paul Vernon aka BigVern has shutdown Crypsty services and fled to China; 5 Million dollars of customer funds have been missing or unaccounted for several months.
It also outline a number of interesting details about the case..
Assets under Bittrex control were frozen and eventually released to the receiver
On the 10th of April 2016 activities were noticed within Bittrex accounts known to belong to Crypty and were brought to the attention of Bittrex and the receiver.
One day later on the 11th of April the Receiver server Bittrex with a demand letter and subpoena requesting that Bittrex freeze any accounts under Cryptsy control or accounts derived from Cryptsy. Bittrex complied with the order and accounts were frozen, after enough proof was provided the funds from these account were eventually released to the receiver.
Cryptsy Account's/Master database destroyed
The master database containing details of Cryptsy account holders and the balances attributed to their accounts among other things has been destroyed. According to the court document on the 4th of April 2016 hours after a court order was served (via email) to Paul Vernon somebody with Vernons credentials logged into the Cryptsy server remotely and destroyed the database.
This action makes for a very interesting problem when looking to re-distribute proceeds of the liquidated assets and leave the receiver in an awkward position which will not allow him to reallocate users balances of specific coins to based on their ownership.
It is yet to be seen but given the lack of information obtainable to the receiver Cryptsy account holders will need to provide sufficient proof that they are in fact a Cryptsy account holders by means of previously saved account statements, reports, emails or sworn declarations
Liquidation of assets
The receiver has outlined the coins secured and has asked the court for exception which would allow him best effort discretion over the date and time to sell the coins on the crypto currency exchanges that would provide the best liquidity and the best overall return for account holders. the exception would mean that he would not be required to have three disinterested appraisers appraise the items sold; the he would not be required to return at least 2/3 of the appraised value and that no prior advertisement of the sale would be required.
The receiver has classed the assets obtained into two categories.
High liquidation value - Sell at market
The assets in the category have been deemed to have enough liquidity in the open market to allow for sale via traditional crypto currency exchanges. He has recommended that the sale of these asset be preformed on an exchange at a time that he deems best to retain as much value for the account holders.
Assets and balances deemed to have a 'High Liquidity Value'
Low-Medium Liquidation value - Private Auction
The assets in the category have been determined to have low liquidity and as such an attempt to sell at market would result in very low retained value for the account holders. He has recommended that the assets in this category be put up for private auction in hopes that the retained value would be significantly higher than selling them at market.
Assets and balances deemed to have a 'Low-Medium Liquidity Value'
Court Document
For those looking to dig into further details please find the link to the document below:
Receivers-Motion-for-Authorizing-to-Liquidate-Certain-Cryptocurrencies-Secured-by-the-Receiver.pdf
TL;DR
Crypto currencies secured from servers seized from former crypto currency exchange 'Cryptsy' will be sold either via private auction or at market on the most liquid exchange to return value to Cryptsy account holders. Due to the remote destruction of the master database containing customer details the receiver currently has no means of identifying customers and the account balances that they possessed at Cryptsy when its services were shut down. At present they will rely on the account holders proving their position to seek compensation for the losses.
I recommend reading the document linked above for further information on what happens behind the scene after a collapse occurs.
oh craptsy.
Craptsy indeed :)
I was hoping to catch some market dumps but i think the receiver is on the ball; they will not impact the market too much.
Which of the coins listed were you most interested in catching? ;)
I wouldn't mind picking up some cheap Dash and maybe ETH although it is not going to effect their current markets at all.
NMC might be a good opportunity as 75,000 NMC would wipe out the whole order book on Polo.
But we also have no idea if these assets have already been sold and this document is now only public due to the sale already occurring(in the URL to the document it is archived /06/2016 - but the date posted on the website was this month); looking at the NMC chart it is possible that someone could have offloaded 75k NMC in the last 3 months but it would have accounted for roughly 25% of the trading volume.
This really upsets me! I want my money back! When doge was first spiking, I bought doge and tried to sell, cryptsy allowed me to sell DOUBLE what I was holding and drove my account into the negative. Then I started doing crypto arb on another account and they banned that account when they saw my other account in the negative. Fucking crooks.
Sorry to hear that man, i too have suffered some losses at the hands of exchanges, Cryptsy is one of them, Mintpal and BTER (BTC_b - maybe they will pay me back one day) :(.
Cryptsy suspended my account before the closed up shop.. this was for my protection as my account had been inactive for 6 months.. i had an email from 4-5 months prior proving that i had made an account action so this was a reg flag. it was a massive pain in the arse to get one of my accounts back and the other sadly never was recovered.
Also had a similar experience as you with a mining pool coinking.io (i think) that double paid out my RDD coin mining and as such disabled my account. i feel like all the coin on balance would have been roughly worth the same as the extra RDD i had received; maybe slightly more; i could have contacted support and organised to get my account back but i ended up just ditching it.
Anyone have interest in bidding on - Private Auction coins?
Not a huge amount on that list that i am interested in. But if the price was right it might be worth a look
I think they should just liquidate it all on the market. Better than having a private auction and then we just have another person holding a bung of bags. Also, when they sell off all these coins, who gets the money? Unless they want to just give it all away :)
Unless someone really likes the project they will find there way back to the marmet anyway so yeah just dump em :). I think once the money is secured as usd victims can come forward providing evidence of their claim and receive compensation. Not sure how it will work out in reality but maybe a timeframe will be given and the people who come forward will get an allocation of the funds proportional to their stake as compared with others.. i.e if only 1 person comes forward with evidence they take 100%
and yet even after the numerous defaults and hacks of external exchanges people still hold millions in those exchanges rather decentralized exchanges like bitshares DEX... People will eventually learn...It will just cost them a lot of money first before they do learn..