Judge Reopens Cryptsy Customer Class Action Against Coinbase

June 6, 2018 3:41 pm Published by

A U.S. District Court judge for the Southern District of Florida has reopened a case involving cryptocurrency startup Coinbase and the now-defunct exchange service Cryptsy 18 months after fraud and mismanagement led to the loss of its funds, CoinDesk reported.

In early 2016, the report said, Cryptsy collapsed amid claims it had been hacked and complaints about withdrawals and access to customer money, which led to the filing of a class action lawsuit.

As a result of the lawsuit, an $8.2 million judgment was rendered against Cryptsy’s CEO Paul Vernon.

In December 2016, CoinDesk reported, a lawsuit against Coinbase by the Cryptsy class-action investors alleged Coinbase should have prevented Vernon from funneling their money through the startup service.

As Coinbase sought to argue those customers are bound by the arbitration agreement Vernon signed, US District Judge Kenneth Marra – who is overseeing the case in Florida – disagreed, the report said. Two other appellate courts subsequently sided against Coinbase, leading to Marra’s June 4 order to reopen.

The plaintiff’s motion to reopen the case indicated Coinbase did not oppose the move, the report said.

“Prior to filing this Motion, the undersigned counsel conferred with Defendant’s counsel, and has been authorized to represent that Defendant does not oppose the relief sought herein,” the document said.

On June 1, counsel for both sides held a telephone case management conference and will submit a report and proposed schedule order before the end of the week.

Read the full motion to reopen the case here:

 

 

Reopen Motion by WN.com on Scribd



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