Coinbase Settles Cryptsy Victims’ Lawsuit for $1 Million

Source: Finance Magnates 2020-01-14

Coinbase has settled a class-action lawsuit brought against it by the victims of now-defunct crypto exchange Cryptsy for $962,500.

Reported by Coindesk, the settlement between the US-based crypto exchange and the Cryptsy victims reached late last month. Per two court documents dated November 27 and December 10, the funds will be transferred to an escrow account and the agent will be responsible for its distribution to the victims.

Following an attack on the crypto exchange, Cryptsy filed for insolvency in January 2016. Per the exchange, it lost around 13,000 Bitcoin and 300,000 Litecoin to the hackers, out of which approximately 10,000 Bitcoins belonged to its clients.

However, after facing withdrawal issues, the clients of the collapsed exchange filed charges against Cryptsy founder Paul Vernon over his alleged negligence, unjust enrichment, conversion, and violation of Florida’s Deceptive and Unfair Trade Practices Act.

The plaintiffs also created a webpage, welcoming any victims who joined the exchange before 2015 and lost funds.

Negligence on the part of the exchange?

US-based Coinbase’s name was dragged into the lawsuit when the plaintiffs accused its involvement in laundering the funds. In a followup complaint filed in December 2016, Coinbase was accused of abetting the theft, facilitating the laundering of around $8.2 million in digital currencies.

Despite Coinbase’s push for a dismissal of the suit and settlement through arbitration, the motion was denied by the court. The recent settlement ended a three-year-long lawsuit that was nearing to a jury trial.

Multiple crypto platforms are facing lawsuits – some from users while others from the Securities and Exchange Commission (SEC). California-headquartered Ripple is also facing a class-action lawsuit that alleged that the company-issued XRP token falls under the category of securities. The hearing on the suit is pending for tomorrow.

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Coinbase Settles Cryptsy Victims’ Lawsuit for $1 Million

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