Vanished Bitcoin Exchange Ordered to Pay $8 Million (USD). Whereabouts Most Likely In China for Cryptsy.
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So getting that intro out of the way, hi everyone! My name is Nick, and welcome to @Sobuka here on Steemit. Today's news might not surprise you. We have yet again another exchange that was hacked back in 2014 rearing its head, but this time on the news it's via an order by the District Court of Florida for the exchange to pay a sum of $8.2 million (USD). On this channel, I talk about crypto currency news as it relates to Latin America, Africa, Middle East, and the Asian Pacific. So the news about this exchange has now bleed over to the area I cover which includes China, and I will get to that Chinese news shortly.
At the present moment, it seems like every single day we hear about an exchange being hacked in the past, and then they suddenly resurface in the news via a court release?! This exchange that I will name should not be new to people that have been in the crypto space for the past few years. The exchange I am talking about is Cryptsy. They have been charged $8 million (USD) in a class action lawsuit. Judge Kenneth Marra of the District Court of Florida passed final judgement against the company.
So back in January of 2014 the cryptocurrency trading platform said it was hacked for 13,000 Bitcoins (BTC) and 300,000 Litecoins (LTC) in which case the value of those BTC holdings at that time was $5 million (USD) and under $1 million (USD) respectively for LTC. Today the combined value of those assets is under $50 million (USD)! Yes, that's freaking insane! So no wonder investors have come together to press charges. Can you guys imagine owning Bitcoin at $200 per coin and Litecoin at $2 (USD) just three years ago! Even I would be pissed.
The owner of the company as reported by Bitcoin News is allegedly somewhere in China. I am not going to speculate on whether he is hiding as the the Florida court have informed the owner via email and his company's PO Box about the judgement. To get Cryptsy's perspective on this, a crypto operator who worked for the exchange at the time had been interviewed by the Miami News Times and mentioned (in which I will read and quote directly from Bitcoin News) "company denied doing any wrong doings, and told the reporter they just regretted not being able to handle the hack the right way. Customers were not notified about the loss that happened in 2014 until the exchange was under water in 2016." Supposedly, the company did have hopes of paying the funds back, but because of Bitcoin's low price at that time, they were unable to maintain any profit. There is also some involvement with the US exchange, Coinbase, but I do not know what the shape or capacity of that involvement was as of right now. We do know that exchanges do work together in the back-end in some type of capacity so this does not surprise me as unusual at all, and given the fact the Cryptsy exchange had ties to the US, it just makes sense.
Since I try my best to cover news on international and foreign lands, this issue now bleeds to China. If the founder is in China as rumored, then an extradition agreement in the form of a treaty will be needed. Until now copies of the court order has been sent to the owner's PO Box and email address so we will wait to see if we hear anything back from the guy.
Now this is not the first time we hear of these exchanges being hacked. We know that Bithumb, the forth largest Bitcoin exchange based in China was hacked some time ago. And currently we still steal hear of the DAO attack still rearing its ugly head. The best way for anyone to protect themselves right now as crypto currencies become popular is to have control of your private key(s) by getting them off these exchanges. For those people who are new to the crypto space this means getting a hardware device similar to a USB or alternatively you can get an application to install on your computer or phone where no third party can easily hack into. However, this puts the risk on you and not the exchange so you have to know what you are doing. But at the end of the day, you will know where your money is when you are sleeping.
Obviously one problem in the crypto space is the hundreds of different types of coins/tokens, but the most obvious ones that are hacked frequently are Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC). So find wallets especially for those cryptos.
Since my channel has a special niche, for more information on wallets, I'd like to refer you guys to the Modern Investor's video below titled, "Cryptocurrency Wallets - Which Are The Best Options".
Lastly, if you like this video/blog-post, please give it a thumbs up on YouTube or Up Vote it on Steemit. If you want to find more information like this, you can follow me on Steemit or hit the subscribe button on YouTube. I will get to you all soon. Thank you.
Below are helpful references towards the discussion.
“Former Bitcoin Exchange Cryptsy CEO Ordered to Pay 8.2 Mln in Class-Action Lawsuit” by Joshua Althauser.
https://cointelegraph.com/news/former-bitcoin-exchange-cryptsy-ceo-ordered-to-pay-82-mln-in-class-action-lawsuit
"Banking on Bitcoin: An Attorney's Big Stake in Cryptocurrency Litigation" by Samantha Joseph.
http://www.dailybusinessreview.com/id=1202792292088/Banking-on-Bitcoin-An-Attorneys-Big-Stake-in-Cryptocurrency-Litigation?slreturn=20170631153500
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