Cryptsy claims hackers stole 13,000 BTC, 300,000 Litecoin, insolvent or bankrupt

Troubled digital currency exchange Cryptsy has claimed that the platform is insolvent. The exchange said in a new blog post that the platform was hacked in July 2014, resulting in the loss of approximately 13,000 BTC and 300,000 LTC .

The blog post goes on to say that unless the platform funds can be recovered or a buyer can make up for the losses, the company will choose to close the website and declare bankruptcy.

According to Cryptsy, the platform has an outstanding debt of approximately 10,000 BTC , worth approximately $4.15 million at press time. Currently, withdrawals and transactions on the site are offline, and the chatroom has been deactivated.

The blog post reads:

“This was of course a significant event for Cryptsy, as at the time, the site’s revenue was still exceeding its expenses and we still had some cryptocurrency on hand. We therefore decided to use the profits to fill these wallet holes, thus avoiding the need to shut down the site completely at that time.”

Cryptsy further pointed out that the developers of altcoin Lucky7Coin were behind the attack.

In a previous blog post, Cryptsy claimed that the root cause of the withdrawal problem on the site was a technical issue, but the new statement completely contradicts this claim.

Cryptsy suspended trading last week and this week, and yesterday, two Florida law firms filed a lawsuit in federal court on behalf of affected customers.

Additionally, Cryptsy blamed an article published on Oct. 4 that claimed that the exchange was being investigated by U.S. authorities. In response, Cryptsy CEO Paul Vernon called the article “defamatory” and denied any investigation existed.

“After the Coin Fire article pointed out a lot of false accusations, the platform started to collapse. The article triggered a run, which led to the problems.”

Former Coin Fire editor Mike Johnson said he received death threats after publishing the article.

Original: http://www.coindesk.com/digital-currency-exchange/
By Stan Higgins
Compilation: Overnight porridge
Source (translation): Babbitt Information (http://www.8btc.com/cryptsy-bankruptcy)