Former Bitcoin Exchange Cryptsy CEO Ordered to Pay $8.2 Mln in Class-Action Lawsuit
US district judge has ordered cryptocurrency exchange platform Cryptsy CEO to pay $8.2 mln in damages towards its customers
US District Judge Kenneth Marra has ordered Paul Vernon, the former CEO of the bankrupt cryptocurrency exchange Cryptsy, to pay $8.2 mln in damages to their customers.
In his July 27, 2017, default court order, Marra ruled that Vernon is guilty in the long-running class action case filed against him and the exchange.
Part of Marra’s order reads:
"The Court further declares that the 11,325.0961 [Bitcoin] which were stolen from Cryptsy customers on July 29, 2014, and which, as of the date of this final judgment ... are property of the Plaintiff Class and subject to and encompassed within this Final Judgment."
In his comment on the order, Attorney David Silver, a representative of one of the two law offices involved in the lawsuit, stated that those who represented the claimants in the case were elated to have obtained a historic success.
"This order is a big step in the path towards vindication and justice for our clients in the cryptocurrency world who were taken advantage of by an exchange operator they trusted with their hard-earned funds."
In early 2015, the then-struggling exchange Cryptsy has announced that it could file for bankruptcy as it is already insolvent due to a hacking incident that cost it around 13,000 Bitcoin and about 300,000 Litecoin. The exchange claimed that unless the funds are recovered or an investor can cover the losses, its site will be shuttered and it will declare bankruptcy.
In early 2016, the exchange has collapsed and its customers have filed a class action lawsuit with the US District Court for the Southern District of Florida shortly afterwards. In April 2016, the court has ultimately placed the exchange into receivership.
Meanwhile, Vernon has failed to respond promptly to the allegations in court, which led to the default ruling. He is believed to be presently hiding in one of the countries in Asia.