A Twitter user with an egg for a profile picture promised something Cryptsy victims desperately wanted: their money back. Operating as @cryptcracker1 and posting on Bitcointalk, he claimed to possess
A Twitter user with an egg for a profile picture promised something Cryptsy victims desperately wanted: their money back. Operating as @cryptcracker1 and posting on Bitcointalk, he claimed to possess access to the bitcoin and litecoin that Cryptsy CEO Paul Vernon said the exchange lost during a hack. He wanted 30 percent of whatever he could return. Vernon apparently balked at the price. They negotiated downward and struck a deal.
Both men signed a contract. Cryptsy rushed it onto Twitter and its website. The document raised legal eyebrows from the start. Both signatures appeared copied and pasted throughout, and Cryptcracker's seemed to read "Wrecker." Journalists who don't make a habit of publishing every anonymous tip questioned the story immediately. Press outlets that do such publishing nonetheless reported the recovery was happening.
Nothing arrived. Days passed. By March 14, Cryptcracker explained the delay: he needed to talk to his lawyer. "Consulting lawyer to make sure nothing gets in between me getting paid my bounty when coins are recovered," he tweeted.
The real problem isn't Cryptcracker's credibility. It's Vernon's. He never reported the alleged hack to authorities. He waited 18 months before telling users about it. In his divorce proceedings, his statements about his financial condition contradicted what he'd said in public. Reports placed him in China. This accumulation of red flags makes the hack story itself questionable.
Some forum members think Cryptcracker is either a Cryptsy staff member or someone working directly with management. They suspect an elaborate con to distract the community or buy time.
That would require Vernon to have concocted the whole thing. If so, he performed a strange version of it. Cryptcracker began tweeting at Cryptsy in January. Vernon didn't respond for three months. If management invented Cryptcracker as cover, they would have announced the recovery immediately, not stalled for a quarter. They would have publicized the deal the moment their delayed withdrawal schemes collapsed. The timeline suggests the two parties weren't coordinating.
But suspicion that they weren't coordinating doesn't mean the coins are coming back. Cryptcracker has shown no evidence he can access the stolen funds. His original claim was knowing the hacker's identity. That transformed into claiming he could recover the coins themselves. Neither assertion is backed up. The simplest proof would have taken him minutes: move a fraction of bitcoin from the account, or sign a cryptographic message with the address. He did nothing.
Think about incentives. A person skilled enough to locate and recover stolen cryptocurrency faces an obvious temptation. The coins come with baggage: they're from a famous theft. Moving them on a standard exchange triggers alarms. But someone with the competence to find them would also have the competence to launder them into untraceable form. Laundering would render them useful. The choice between keeping millions and returning them is not complicated.
Even if Cryptcracker wanted to help, the absence of proof means believing him requires faith. No evidence exists that the coins have been recovered. Without evidence, assume they haven't been.
Two outcomes seem plausible. The hack occurred, and Cryptsy gambled that Cryptcracker delivers. Or no hack happened, and Cryptsy responded because staying silent looked worse than playing along. In the latter scenario, they resemble O.J. Simpson vowing to search forever for Nicole's real killer. Everyone understands the coins are gone. Management makes the effort anyway, for the appearance of it.
In either case, this is not a recovery deal. Cryptsy either contracted with someone who cannot do what he promised, or it manufactured theater to cover something darker. At best, an amateur negotiated with an unknown person with no proof of capability. At worst, distraction from worse problems.
The stolen coins have not moved. If they do, this will be updated.
