Coinbase wants to compensate Cryptsy victims

In the case of the Cryptsy robbery, an agreement was reached after almost three years. The crypto exchange Coinbase compensates the victims of the crypto-fraud with almost one million US dollars. Apparently, the crypto-giant fears a jury trial. It was not the company’s first attempt to settle out of court. 

According to media reports, Coinbase agreed to a settlement with the victims in the Cryptsy case. According to court documents dated November 27 and December 10, 2019, the Bitcoin exchange agreed to pay a settlement amount of almost one million US dollars.

The amount is $962,500, which will be paid to a trustee. The trustee will then arrange the distribution of the money. A hearing on April 17 this year will finally clarify whether the settlement requires further corrections. In a previous court case, the victims’ lawyers had already won over 11,000 BTC.

Meanwhile, the plaintiffs in the Cryptsy case are extremely well organized. For example, they created a website for potential victims where they could report claims. Brandon Leidel is considered the representative of the plaintiffs, who receives BTC 2,500 for his efforts. He was the one who initiated the class action in 2016


The Cryptsy heist: User vs. Coinbase

The Cryptsy case is based on the insolvency of the Bitcoin stock exchange in January 2016. This happened as a result of an alleged hack in the course of which 13,000 BTC and 300,000 Litecoin changed hands unlawfully. Customers of the platform accused CEO Paul Vernon of fraud and misappropriation of their assets. Those affected were certain: Vernon himself had faked the hack and stolen the coins. Meanwhile he is said to have washed his prey with the help of Coinbase. Vernon allegedly transmitted 2.2 million US dollars to his wife via the platform. Therefore, in December 2016, the Bitcoin exchange was facing a lawsuit for aiding and abetting the theft of approximately 8.2 million US dollars in crypto-currencies.

It was long disputed whether Coinbase itself owed damages to the victims (BTC-ECHO reported). The Bitcoin giant defended itself with all means – without success. The US District Judge Kenneth Marra rejected the applications to dismiss the case and to appeal to an arbitration court. After Coinbase’s appeal against Marra’s decision was also dismissed, it looked like the jury would decide the case.

It remains to be seen whether Coinbase’s cooperation will be rewarded and whether the case is closed. The plaintiffs signalled relief through their lawyers. They are happy about the step of Coinbase to solve the Cryptsy case.