Coinbase To Face Jury Trial – Coinbase- Cryptsy Lawsuit

The law firm Silver Miller appears to be very active in representing clients who are involved in cryptocurrency-related class action lawsuits. Earlier this month, there was a report about their involvement in a lawsuit against the Nano team for their alleged mishandling of the BitGrail hack, but the law firm also has a class action lawsuit against leading US cryptocurrency broker Coinbase.

The case is centered around the failed cryptocurrency exchange Cryptsy, the CEO of which, Paul Vernon, is alleged to have used Coinbase to launder illegitimately obtained funds. According to the lawsuit, Coinbase did not employ proper precautions which would have prevented Vernon from absconding with millions of dollars’ worth of customer funds. Vernon has been ordered by a court to return $8.2 million to his customers, but he is currently in hiding.

According to Silver Miller words in the description of the lawsuit:

 “Coinbase failed to satisfy its regulatory requirements or perform any reasonable investigation into the suspicious activity in Mr. Vernon’s and Cryptsy’s Coinbase accounts. Although the exact amount remains undetermined, the lawsuit estimates that the value of the digital funds laundered through Coinbase exceeds $8,200,000.00. Mr. Vernon is believed to have absconded with those funds when he abandoned Cryptsy and fled to China in late-2015.”

Coinbase has filed multiple appeals to prevent the lawsuit from going to public court, but all of them have been denied so far. The United States Court of Appeals for the Eleventh Circuit decided that the case will be settled via a jury trial.

The trial will be interesting to follow as the court’s findings could have important implications for cryptocurrency exchanges – the cryptocurrency space is notorious for its loose know-your-customer and anti-money laundering procedures.