Crypty’s bug causes btc losses

Cryptsy_bug

The altcoin land is full of excitement and trouble. The all popular bitcoin exchange Cryptsy has been found to have a bug related to it’s trading engine.

What is it?

The bug has been pointed out on reddit by prohashing, which is an altcoin mining pool. They are a multipool which allows the mining of any coin. In short, prohashing is able to pay out users in bitcoin by selling the altcoins on exchanges using an automated bot. Prohashing decided to use Cryptsy’s API to facilitate the automated trading of the altcoins. However, on Wednesday, November 19 Megacoin’s order book containes a phatom sell order which was listed far below the lowest bid. Here is a picture of the mysterious order:

Cryptsy bug

 

As a result, any person or algorithm that attempted to trade Megacoin saw that the price of Megacoins was 0.00000007, since it was the lowest price.

Throughout the day, the price should have been at that low level because people were trading against that price. They were being charged the price that the graph actually showed, which was higher.

When Cryptsy fixed the bug to allow the sell order to be filled, orders were able to be filled at the low price, so there was a brief crash. Then the market returned to normal when the sell order was filled.

MEC_error2

Cryptsy’s response

Unfortunately Cryptsy did not handle the situation as well as we would hope. Prohashing (the mining pool affected by the bug) posted a complaint on reddit in regards to this issue. They stated that Cryptsy’s staff acknowledged the error and fixed the order after being notified of the issue. However, prohashing and no other customers have been reimbursed for that loss.

In hopes of resolving the problem, we contacted Cryptsy through their support desk twice. We politely requested that they investigate the issue and reimburse us for the excess bitcoins, since they had advertised one price and charged another. A customer service representative acknowledged that Cryptsy was responsible for the error, and stated that they would send the issue to the “network team” for investigation. Several minutes later, the bad order was removed from Cryptsy’s system. We submitted a reply explaining that a store cannot advertise one price, charge another, and then refuse to correct the difference, and asked for the issue to be escalated to a supervisor or directly to Mr. Vernon. (Prohashing from reddit)

Cryptsy’s Customer Service Manager Jim aka: JShock replied with:

Unfortunately our terms of service state that we do not endorse , nor can we be responsible for the use of 3rd party content ie: If you were not using the automated trading software which is not endorsed by cryptsy, im sure the trades would not have been placed. Wish i could do more to assist you, but there is not much more I can do about these types of situations.

The problem here is that no 3rd party software was used. Prohashing used Cryptsy’s own API to perform the auto trading so the fault lies completely on Cryptsy’s software. We hope Mr. Vernon resolves this issue immediately and we will keep this post updated.

Please follow us on twitter @btc_feed for the latest bitcoin related news which include bitcoin market analysis with market price prediction.

 

Mark is a 25 year old cryptocurrency entrepreneur. He was introduced to Bitcoin in 2013 and has been involved with it ever since. He used to mine bitcoins and altcoins but now focuses on blogging and educating others about digital currencies.