Cryptsy-Coinbase Lawsuit to Head to Jury Trial

In the case a former Cryptsy client claims that Coinbase had to prevent Paul Vernon (CEO of Cryptsy) from laundering stolen money through a wallet at Coinbase
24 April 2018   1605

The appeal court of the US state of Georgia approved the lower court's decision to reject the appeal of Coinbase on the suit, according to which the company is accused of not being able to prevent Cryptsy CEO from hiding with the money of his clients. This is reported by CoinDesk.

In the case, plaintiff Brandon Leidel, a former Cryptsy client, claims that Coinbase had to prevent Paul Vernon (CEO of Cryptsy) from laundering money through a wallet at Coinbase.

Vernon used Coinbase to launder millions of dollars he stole from his clients before the collapse of Cryptsy.

Coinbase tried to negotiate the suit in an arbitration court, pointing to the custom agreements that Vernon signed when he started using the purse of the exchange. However, last year the judge ruled that the clients of Cryptsy are not bound by the same agreements as Vernon, and therefore - in this case it is not necessary to make an arbitration award.

Coinbase appealed to this decision, but the district court rejected it.

Leidel does not seek to enforce the terms of the User Agreements, nor does he allege any tort rooted in an allegation that Defendant breached or facilitated a breach of any obligation uniquely imposed by those agreements. In other words, Leidel's claims are viable, if at all, without reference to the User Agreements, as the duties Defendant allegedly breached were not imposed by those agreements.
 

The Eleventh Circuit Court of Appeals

As a result, the case now turns into a jury trial in the form of a class action.

We are pleased, though not surprised, the appellate court affirmed the trial court's decision to keep this dispute in the public view ... We look forward to having Coinbase answer for its role in the millions of dollars in harm suffered by our clients; and we look forward to resolving these claims in court.
 

David Silver

Plantiff

Coinbase did not immediately respond to a request for comment of Coindesk.

Coinbase to Appear in San Francisco District Court

Exchange representatives must appear in court due to issues related to BCH trading launch in 2017
07 August 2019   150

San Francisco District Court judge Vince Chhabria ruled that the latter showed negligence and “clear incompetence generated by haste” when it started trading in Bitcoin Cash (BCH) on Coinbase. Now Coinbase, apparently, will be forced to stand trial, Bloomberg reports.

So, at the end of 2017, the exchange opened BCH trading, but was forced to suspend operations after 2 minutes due to high volatility and suspicious price increases - the coin began to grow rapidly several hours before the announcement of Coinbase.

Then the company was accused of insider trading, later crypto enthusiasts even began to find confirmation of this.

According to the judge, the users who bought VSN at inflated prices were primarily affected. He noted that the suspension of trading was too hasty and disrupted the normal functioning of the market.

BCH buyers claim that Coinbase could have announced a bid in advance to prevent a price spike, but it did not. The judge agreed with this opinion and noted that shortly before the launch of BCH trading on Coinbase, the Chicago Mercantile Exchange opened trading in bitcoin futures, which could become a factor of too much market participants' recovery.

According to the publication, Coinbase has not yet commented on the court decision.

Recall that in March 2018, a class action lawsuit was filed against the company, in which Coinbase was accused of “artificially overpricing” Bitcoin Cash through trading based on insider data.