Cryptocurrency Exchange Cryptsy Now Involved in GAW Scandal

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Cryptsy, a cryptocurrency exchange based in the US has allegedly received a PayCoin Prime Controller from the PayCoin Foundation. There was only a brief announcement on the PayCoinTalk Forum, while users on Bitcointalk investigated this by themselves.

PayCoin Prime Controllers are essentially PayCoin wallets which stake coins at a much higher rate than normal wallets; currently, there are 49 PayCoin Primer Controllers which stake at a 100% per annum rate. Previously, 35 of these staked at rates as high as 350%, but the owners of the controllers came to a consensus to lower the rate.

Most of the PayCoin Prime Controllers were originally owned by GAW Miners, from when they created PayCoin. However, most of these were then handed over to various non-profit organizations, namely The PayCoin Foundation Inc., PayCoin Core Development Corp., and XPY Trust. These controllers have a large influence over the PayCoin network, which is why the ownership of these are largely controversial.

However, recent news has shown that one of these controllers was given to Cryptsy, or sold to for $1 USD. This was done to ‘promote decentralization’ and ‘help cryptsy update their wallets, but there have been many accusations on bitcointalk that Cryptsy was involved in the PayCoin scheme all along, and that their administrators were persuading customers to invest in the coin.

There have been many suggestions to destroy all of these hyper staking PayCoin Prime Controllers, but the parties that own them have either ignored these suggestions, or stated that would cause PayCoin to be completely unsustainable. Since it is quite obvious that they won’t be gotten rid of, it’s important to know who owns them. However, there is a large amount of PayCoin Prime Controllers that are held by an anonymous party, and it has only recently come to light that Cryptsy also owns one. There is a direct conflict of interest in this, since the Prime Controller produces PayCoins, and Cryptsy offers PayCoin trading with other currencies. This means that Cryptsy can also sell PayCoin directly through its system, which would caust the price of PayCoin to plummet even further.

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