Coinbase agrees to settlement with Cryptsy exchange victims
By Bob Garcia
The exchange decides to try to make peace instead of being drawn into a lengthy court battle
In the past couple of years, several hacks to cryptocurrency exchanges or wallets have caused some companies to get drained from operational funds, with some of them take such a hard hit that they couldn’t make it back. This is the story of the Cryptsy exchange, which, back in 2016, allegedly saw 13,000 BTC and 300,000 LTC stolen from the company. However, the company’s founder and CEO, Paul Vernon, was accused of having stolen the funds. Since the company was unable to return the funds to its users, a lawsuit was presented against Vernon and, one of the biggest exchanges in the world, Coinbase, was involved partly in the suit since it was asserted that the exchange had facilitated transactions for Vernon. In order to put the matter behind it, Coinbase has agreed to provide a settlement in hopes that it will appease Cryptsy users.
Coinbase reportedly helped thieves, directly or indirectly, launder a total of $8.2 million in crypto. The exchange did everything they could to deal with this suit through arbitration, but the court denied its petition. Three years later, Coinbase was finally able to reach an agreement with the accusing part before the case approached a jury trial and, Coinbase has now agreed to pay $1 million back, which will be deposited in an escrow account then distributed to the affected users.
This is not the first time a cryptocurrency company must confront a lawsuit since digital currency became popular. 2017 was filled with lawsuits from investors who lost their funds. Not to forget the US Security Exchange Commission, also chasing any crypto-based company that is selling unregistered securities and trying to scam users.