$8.2 Million: Court Orders Default Judgment Against Cryptsy CEO

A U.S. district judge has handed down a default judgment worth $8.2 million against the CEO of the collapsed Cryptsy exchange.

AccessTimeIconJul 28, 2017 at 1:00 p.m. UTC
Updated Sep 13, 2021 at 6:46 a.m. UTC

A U.S. judge has ordered that the chief executive of the now-defunct cryptocurrency exchange Cryptsy must pay $8.2 million in damages to its customers.

U.S. District Judge Kenneth Marra handed down the order in the long-running class action lawsuit against the Florida-based cryptocurrency exchange that collapsed in January 2016 after months of growing complaints from customers. The class-action lawsuit was filed shortly afterwards, with the court ultimately moving to place Cryptsy into receivership the following April.

According to Marra's July 27 court order, Cryptsy CEO Paul Vernon – who has denied stealing user funds – "is liable to the Plaintiff Class in the principal sum of $8,200,000, for which let execution issue forthwith."

Vernon, who is believed to be currently residing somewhere in Asia, did not respond to the allegations in court, a circumstance which led to this week's default judgment.

The order notably states that the more than 11,000 bitcoins taken from the exchange by Vernon are owed to the customers.

"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," Marra wrote.

In a statement, attorney David Silver, who represents one of the two law firms involved in the class action, said that those who pushed for the result "are thrilled to have achieved a historic success," adding that work was underway to gain control of the 11 bitcoin wallet addresses listed in the court order.

He told CoinDesk:

"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."

A copy of the full court order can be found below:

Justice statue image via Shutterstock


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