What does this mean for coin holders? Is Cryptsy going to be covering the losses, or are they still solvent?
Why would cryptsy cover the loses? Powercoin holders took the risk of dealing in something so unstable. They are the ones that 'cover' the losses.
Well they did give the all-clear and started trading Powercoin again after it was known that a 51% attack had taken place. They were exchanging coins that didn't even exist.