Judge Grants Cryptsy Lawsuit Class Action Status

A Florida judge has certified a class action lawsuit filed on behalf of customers of the now-defunct digital currency exchange Cryptsy.

Aug 25, 2016 at 5:20 p.m. UTC
Updated Sep 11, 2021 at 12:27 p.m. UTC

A Florida judge has certified a class action lawsuit filed on behalf of customers of the now-defunct digital currency exchange Cryptsy.

In an order issued yesterday, US District Judge Kenneth Marra approved a request by plaintiffs for class action certification, originally filed on 27th July.

According to the order, the certification covers all Cryptsy account holders as of 1st November, 2015. Specifically, it includes anyone "who held bitcoins, alternative cryptocurrencies or any other form of monies or currency" prior to that date on the exchange.

The lawsuit dates back to January, when after months of growing problems with withdrawals, Cryptsy abruptly closed amid claims it had suffered a debilitating hack a year and a half prior. At the time, the exchange said that it had millions in outstanding customer liabilities.

CEO Paul Vernon, one of the defendants named in the class action suit, said at the time that customers were misled about the health of the exchange in order to avoid a "panic".

In yesterday's court order, Marra further wrote:

"The Class claims are the conversion, negligence, unjust enrichment, specific performance, FDUPTA, fraudulent conveyance and civil conspiracy claims contained in counts I-V and VII – IX of the Amended Complaint."

The certification comes months after the court approved a receiver, handing over control of Crypty's assets in the process.

A recent report from receiver James Sallah alleged that Vernon had misappropriated millions of dollars in user funds, an allegation Vernon later denied in an email to CoinDesk.

Despite denying the claims, Vernon, who is believed to be residing somewhere in Asia, has yet to formally respond to the suit in court.

The full court order can be found below:

Order by CoinDesk on Scribd

Gavel image via Shutterstock


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