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