Cryptsy Class Action Suit Reopened by Judge

Cryptsy and Coinbase Case

A judge from the U.S. District Court for the Southern District of Florida has ordered the reopening of a case involving Coinbase and now defunct crypto exchange Cryptsy.

Cryptsy had collapsed in early 2016 after allegations of fraud and mismanagement surfaced. Cryptsy claimed it had been hacked and drained of funds. This decline, after months of complaints about withdrawals and issues with access to customer money, ultimately led to a class action suit and an $8.2 million verdict against Paul Vernon, Cryptsy’s CEO.

In December 2016, a lawsuit was filed, this time against Coinbase by the same Cryptsy class-action investors. They alleged that Coinbase should have prevented Vernon from their money through the startup’s service to his pockets.

Coinbase argued that these customers are bound by the arbitration agreement that Vernon signed, but Judge Kenneth Mara, who is currently overseeing the case in Florida, disagreed with Coinbase’s stand. Two more appellate judges concurred with Mara, leading to the June 4 order to reopen the case.

The plaintiff’s motion to reopen the case indicated that Coinbase did not have any objections towards the move.

“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 states.

Last June 1st, both parties held a case management conference via phone and will submit a report and proposed schedule order before the end of the week.

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