Additional Compensation Available for Cryptsy Victims, Court Opinion Says

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Last week, some former users of the old Cryptsy cryptocurrency exchange received a notice informing them of a new turning point in the ongoing collective settlement process. Authorized by the United States District Court for the Southern District of Florida, the document says those who were defrauded in the digital finance platform’s collapse in 2016 may be eligible to receive cash. ‘money from an additional recovery.

Cryptsy was a crypto exchange that went bankrupt in January 2016 after months of user-reported issues with withdrawing funds from the platform. The court then found that Cryptsy founder Paul Vernon had stolen millions of dollars in digital assets from customers before fleeing to China. Later that year, a group of exchange users filed a class action lawsuit against the company and its founder, while what remained of Cryptsy was placed in receivership.

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The court-appointed receiver began liquidating various assets associated with the missing company, raising around $ 1.5 million in June 2017 to be distributed among the victims.

The receiver and the group representative then filed further legal action against Coinbase, which they claimed to have aided and abetted Vernon’s conduct by allowing him to convert the stolen funds into US dollars. Nearly three years of litigation resulted in a class action settlement, with Coinbase agreeing in January 2020 to pay nearly $ 1 million to defrauded Cryptsy account holders.

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The most recent notice concerns another round of scam fund recovery. A lawsuit against Xiuxia Liu, Paul Vernon’s girlfriend, allowed victims’ representatives to obtain an additional $ 875,000 on behalf of the class.

The funds will be distributed proportionally among those who filed valid claims in the previous two settlements, or who submitted a valid claim in the Liu settlement by January 12, 2022. Payments are expected to start being made no later than February 20, 2022 ., according to the notice.

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