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Coinbase offers $1 million settlement in Cryptsy class action lawsuit

Image by Jon Russell from Pixabay

Wed, 15 Jan 2020, 04:35 am UTC

Coinbase is offering a nearly $1 million settlement in the class-action lawsuit brought by the customers of the now-defunct Cryptsy cryptocurrency exchange, as shown on the set of documents acquired by CoinDesk.

The documents were dated Nov. 27 and Dec. 10, 2019, and showed that Coinbase agreed to give $962,500 to an escrow agent handling class action claims related to a previous case against Cryptsy. The lawyers for the plaintiffs have already won 11,325 BTC from this previous case.

Cryptsy claimed insolvency back in 2016 after a purported hacking incident in which the exchange claimed to have lost around 13,000 bitcoin and 300,000 litecoin. However, customers insisted that it was a fraud and the coins were stolen by founder Paul Vernon and were laundered through Coinbase.

The customers responded with a class-action lawsuit against Vernon over his alleged negligence and violation of Florida’s Deceptive and Unfair Trade Practices Act. The victims also filed a followup complaint accusing Coinbase of abetting the theft of around $8.2 million worth of cryptocurrency.

The designated class counsels were the Silver Miller law firm and Wites Law Firm. Attorney Marc Wites described the cases against Coinbase and Cryptsy as “difficult” to resolve.

“When companies go out of business, founders flee the country and the amount at issue is relatively small, most plaintiff law firms would decline to pursue the case,” he said.

“We were the only lawyers in the country to pursue a case against Cryptsy or Coinbase, individually or as a class action, and we were able to obtain multiple meaningful recoveries for victims who would have otherwise been left without any recourse.”

Meanwhile, David Silver of Silver Miller law firm commended Coinbase for their efforts in resolving the case. He also explained how unregulated exchanges like Cryptsy could shun regulators and steal from their clients. He also reminded businesses to be responsible with whom they do business or associate with.

Coinbase has just launched the Coinbase Pro mobile app for Android customers which offers advanced crypto traders the necessary tools they need to make trades while on the go.

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