Cryptsy Hit with Class Action Lawsuit for Holding Captive $5M

As if Big Vern needed any more trouble with the cyberattack he's investigating, Cryptsy now faces a challenge to defend its behaviour in front of a court. On Wednesday, American law firms Silver Law Group and Wites & Kapetan, P.A. filed a nationwide class action lawsuit in a U.S federal court against the Florida-based cryptocurrency Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term and its head, Paul Vernon, according to court documents seen by Finance Magnates.

The lawsuit details that over the past several months, numerous Cryptsy account holders have been denied access to their accounts and were unable to withdraw any and all forms of currency from them. Further it says that despite repeated inquiries to Cryptsy, users are being left without any meaningful response or information from Cryptsy and have had their withdrawal demands either denied or tabbed as “pending” for days, weeks, or even months.

Although the exact amount has yet to be calculated, the law firms say they believe, that the value of the digital funds being held captive at Cryptsy exceeds five million dollars.

The plaintiff in the case is Jinyao Liu, an individual from Fairfax County, Virginia and the class of victims on whose behalf he is pursuing justice includes: “All Cryptsy account owners who deposited Bitcoins, alternative Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term, or any other form of monies or currency at Cryptsy and have been denied access to their accounts and funds between November 1, 2015 and the present date.” The lawsuit asserts claims for negligence, unjust enrichment, conversion of funds and property, and violations of Florida’s Deceptive and Unfair Trade Practices Act.

Scam Refund

With all the criticism about him not responding to the withdrawal issues claims, Big Vern at least issued an update on the details of the phishing attempt that Cryptsy is investigating. A system notice on the site now explains there is a phishing attempt going around prompting users to go to a Cryptsy-refund website.

There were two avenues for the phishing attempt, one via SMS: "using our provider Twilio and gained entry into our logs and sending ability via a weak password on that account. The passwords on this account have been secured." The other avenue was via email using the exchange's mailing service (Mailgun), but was not sent using its account. "It is uncertain where the email list for this Phishing attempt was attained from, as we do not show any unauthorized access to our Mailgun account nor our internal systems."

"Regarding other issues that have been apparent at Cryptsy for the last couple months, I will be making another post to explain what has been happening in the next couple days. Until we are able to determine the extent of the phishing attempt, all withdrawals are paused and will be cancelled before they are brought back live.....BigVern"