Class Action Lawsuit Filed Against Cryptsy

Journalist:
James Moreau
January 14, 2016

Adding to publicity issues experienced by the digital currency exchange Crypsy, Silver Law Group along with Wites & Kapetan, P.A. have filed a nationwide class action lawsuit in federal court against and it’s principal, Paul “Big Vern” Vernon.

Over the past several months Cryptsy account holders have claimed that they’ve been denied access to their accounts and have been unable to protect or control their assets.

The lawsuit claims that users have been denied any legitimate or substantive response from the company on behalf of their reasons for holding funds. The claim estimates that approximately $5,000,000 USD worth of assets are currently being held by the company. The official  claims against Cryptsy are negligence, unjust enrichment, conversion of funds and property, and violations of Florida’s Deceptive and Unfair Trade Practices Act.

Since November 22nd, Vernon, the principle of Cryptsy has shared 5 Twitter updates about various problems being had with the back-end technology, a denial-of-service attack and some hardware issues of the company, which were included in the filing of the Class Action Lawsuit. Currently, the front page of the website has a red notification at the top of the page warning visitors about a breach in their systems and a potential phishing hazard.  Some users report being left without response or information from Cryptsy on the status of their funds and have had their withdrawals either denied or tabbed as “pending” for days, weeks, or even months.

In the terms listed on Cryptsy’s website, the company states:

“Suspension of payment and/or the hold on your Account will continue until the dispute, allegation, orproblem is resolved or determined to our satisfaction. In no event will we be liable for any delay or refusalto follow instructions or for returning items unpaid that occur as a result of a dispute or uncertainty overthe ownership or control of your Account or the suspension, freezing or termination of your Account forany of the reasons stated above. In the event we freeze the funds at issue from your Account, you agreethat we are not required to pay interest on such funds.”

Also read: Cryptsy: Mt. Gox Junior?

They go on to claim in regards to halted trading, deposits and withdrawals:

“Cryptsy makes every attempt to help prevent and mitigate crypto currency attacks. However, should an attack occur and we are able to confirm it, then Cryptsy will immediately halt trading, deposits, and withdrawals for that coin. If it is determined that such an attack caused the currency to greatly decrease in value, then Cryptsy will discontinue trade activity on that currency entirely. Resolutions concerning deposits, withdrawals, and user balances for an attacked currency will be determined on a case by case basis. “

There has been no official or public announcement anywhere on the Cryptsy website about claims against them. Attempts to contact Cryptsy for comment on the  matter have gone unanswered.

Screenshots of the lawsuit can be seen below.

Meanwhile, the Silver Law Group has previously represented an alt coins trader against the exchange in an unrelated case. Skye Bonnow sued Cryptsy in October 2014 after alleging that he was defrauded by the exchange. The trader claimed he lost 140 BTC from his Cryptsy account.

The Silver Law Group weren’t immediately available for comment at the time of publishing. CCN will update this developing story with a comment from the law firm.

Featured image from Shutterstock.

Last modified (UTC): January 14, 2016 19:15

James Moreau