Could Cryptsy be Dogecoin’s Mt.Gox?

Cryptsy hasn’t been very popular in the Dogecoin community lately. After multiple failures, especially during high volatility, many have turned their back on the biggest Dogecoin exchange. Despite this exodus, Cryptsy is still one of the leading exchanges. Due to the continuously high volumes at Cryptsy, they can offer the best prices and keep most of their user base. There are, however, several signals that Cryptsy might not be fully in control of its business.

System Capacity

Previously it was discussed that Cryptsy only offers limited control to its users when it comes to trading order types. They have only one order type available: limit orders that receive their limit at the current best market rate by default. Market orders and advanced order types aren’t available. The lack of these order types could result in an additional strain on the system capacity of Cryptsy, which has already been overloaded several times. Not being able to put in a market order could result in having to adjust limit orders (meaning they have to be cancelled and re-entered). This could lead to unnecessarily reducing processing power that could be allocated to executing orders. Unavailable advanced order types result in users having to login and actively manage their position, further overloading the system during peak hours. As this issue is not addressed, Cryptsy leaves itself exposed to operational failures.

Customer Support

Cryptsy did not respond to a request to comment on how the trading system will change in the (near) future. This points to another issue at Cryptsy, as their customer service is often classified as unsatisfactory in the Dogecoin community. Too many support tickets, or simply an irresponsive support team, is another indication of potential lack of control.

Checks and balances

The most severe case to-date, however, is one that shows that the internal checks and balances at Cryptsy aren’t functioning properly. One user showed an image of the customer service asking him to return his trade balance back to zero, as a system overload caused it to go negative. This shouldn’t be possible under any circumstance, as it could cause a gap in the actual balance sheet. This sounds a lot like Mt.Gox, where 850,000 Bitcoins went missing before it filed for bankruptcy. It is also shocking to find that the customer service is asking the customer to deposit or buy more coins to fix a system failure on their end. According to several users responding to this, this isn’t the first time this has happened either.

Caution advised

Altogether, there are various signals that trading at Cryptsy is not without risk. Various system failures make it seem like it’s just a matter of time before Cryptsy faces a serious accounting or security failure. This doesn’t mean this will actually happen, but where there is smoke there is usually fire.

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