There is a storm heading Cryptsy’s way. The Florida, USA based cryptocurrency exchange is currently facing a class action lawsuit for illegal practices. The class action lawsuit was filed by Silver Law Group and Wites & Kapetan last month. The lawsuit has been recently updated to include Lorie Ann Nettles, ex-wife of its founder Paul Vernon as a co-defendant along with him.
The cryptocurrency exchange was founded three years ago in 2013 by Paul Vernon. The exchange is accused of negligence, deceptive and unfair trade practices, unjust enrichment and conversion of funds and property after the platform prevented its customers from accessing over $5 million worth of funds and assets they had deposited with Cryptsy.
The trouble started in mid-2015 after Cryptsy announced that it has lost millions of dollars’ worth of funds belonging to customers from its online wallet. However, according to reports, the exchange failed to report this incident to FinCEN by filing a Suspicious Activity Report. Few months down the line, Cryptsy allegedly started withholding customer assets and the difficulties faced by customers while attempting to withdraw their funds were attributed by the platform to DDoS attacks.
A class action lawsuit was filed in this regard earlier this year. The lawsuit was followed by Cryptsy confessing that they failed to comply with the FinCEN regulations by not filing a report with regulatory body as any Money Services business was expected to do in such situations.
In recent developments, the prosecution believes that Cryptsy’s founder Paul Vernon and his wife at that time, Lorie Ann Nettles used customers’ funds to buy property worth a million dollars in Florida. Later, the property was transferred to Lorie Ann Nettles by staging a marriage dissolution. The new updated class action lawsuit now lists Lorie Ann Nettles as a co-defendant for her alleged part in the scheme along with her ex-husband Paul Vernon.
One can access a full copy of the lawsuit against Cryptsy here.