Facts

Paul Vernon created the for-profit money services business, Cryptsy, with the purpose of keeping certain financial records and granting free and unfettered access to consumer accounts. Through Cryptsy, customers could register new accounts, deposit Bitcoin or other cryptocurrency, and thereafter actively engage in the exchange and trade of Bitcoin as well as other cryptocurrencies.

Vernon eventually switched Cryptsy from its current Money Transmitter to Coinbase, Inc.. Vernon also opened an account for himself with Coinbas. Cryptsy then liquidated Bitcoin through Coinbase for U.S. dollars and liquidating those Bitcoin through both Cryptsy and Vernon's accounts at Coinbase. Class representative, Brandon Leidel, and appointed Receiver, James D. Sallah, brought a national class action suit against Coinbase.

PLAINTIFFS' CONTENTIONS: Plaintiffs contended that defendant failed to request origination wallet addresses and a confirmation transaction to verify the veracity of his claims that he mined the Bitcoin. Plaintiff contended further that defendant knew its investigation was inadequate, but accepted the inadequacy to increase its profits.

DEFENDANTS' CONTENTIONS: Defendants denied the contentions.

Result

The parties agreed to a $962,500 settlement.

Other Information

JUDGE: Hon. Kenneth A. Marra.