This is a theory with the supposition that the site is legitimate:

If they have the majority of our funds in trade, they should still have them. I don't buy the story about a government seizure. I do believe that they lost a portion of the funds in trading or the collapse of an exchange. I can't imagine that they would have much going on at Cryptsy. Altcoin volume has been very low for months now and Cryptsy isn't the place to be trading BTC or LTC. Maybe they were doing some arbitrage, but not likely very much.

I think they are trading this move in BTC and trying to win back whatever they lost. If the number is really 22%, it shouldn't be too hard to do. It appears that they decided to cut off our "mining" accrual for a period of time to "stop the bleeding". He hinted at something like this when he said that they may have to cancel some mines or reduce payouts for a while. So, "the government shut them down" while his lawyers fight it in court. That gives them time to win back what was lost. If BTC can make some large moves in the next week or so(which it should), we may see the site come back up and operations continue. We will be told that Sector's lawyers worked out the problem and they are now allowed to continue business. Look at the bright side, at least we can continue getting payouts. We might be sacrificing a week or two (or three) of our payments.

It would be great if the cheerleaders and naysayers would quiet down for a while until we get a message from Sector. Seriously, this banter is not helping anyone. So far this looks bad. If it comes back, Sector will regain everyone's trust and respect. If it doesn't....