September 21, 2017

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Class Action Lawsuit Officially Launched Against Cryptsy



Class Action Lawsuit Officially Launched Against Cryptsy

New reports have come in detailing a class action lawsuit that has been filed against Cryptsy. The cryptocurrency exchange has been under scrutiny for many weeks now, with multitudes of users complaining of withdrawal issues when trying to get their Bitcoin back. On November 22, the website allegedly suffered a severe denial of service (DDoS). Since the reported attack, Cryptsy’s reputation has been riddled with rumours of insolvency. Many people are criticizing the exchange for not explaining why they cannot withdraw BTC, LTC and other valued altcoins.

Also read: 5 Reasons Why the Bitcoin Price Will Rise in 2016

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Class-Action Lawsuit Launched Against Cryptsy

“Plaintiff and the potential Class Members have also been damaged in other and further ways subject to proof at trial. Therefore, CRYPTSY engaged in unfair and deceptive trade practices in violation of section 501.201 et seq., Fla. Stat.”

– Class Action Lawsuit

Big Vern

There has been no official response made by the Cryptsy team to follow up with this criticism, minus some tweets from Paul “Big Vern” Vernon, the CEO of Cryptsy, with vague information. The last tweet made by Big Vern “All wallets will be offline on Friday 12/18 for one hour due to equipment changes.” And previously before this: “Thank you, everyone, for the patience while we get these issues resolved. The team is working hard, and we will try to do more frequent updates.” Now a phishing attempt has been announced by Big Vern on January 12th. He says, A new phishing attempt is out. It is not from cryptsy. Do not acknowledge it” with no response to any of the new allegations.

The Cryptsy website reads:

“Phishing Attempt:: There is a phishing attempt going around prompting users to go to a cryptsy-refund website. Do not go to this website or give your login details on any website other than the official Cryptsy website. There were two avenues of the Phishing attempt. One was via SMS, using our provider Twilio and gained entry into our logs and sending ability via a weak password on that account. The passwords on this account have been secured. The other avenue was via email using the same mailing service we use (Mailgun), but was not sent using our account. It is uncertain where the email list for this Phishing attempt was attained from, as we do not show any unauthorized access to our Mailgun account nor our internal systems. We are still investigating this matter. If you were a victim of this phishing, you should log into your account at Cryptsy immediately and do the following: 1. Change your password and enable 2fa if you don’t already have it enabled. 2. Check your pending withdrawals, we currently have withdrawals disabled so if you see one that shouldn’t be there you can request to have it cancelled. Regarding other issues that have been apparent at Cryptsy for the last couple months, I will be making another post to explain what has been happening in the next couple days. BigVern UNTIL WE ARE ABLE TO DETERMINE EXTENT OF THE PHISHING ATTEMPT, ALL WITHDRAWALS WILL BE CANCELLED AND ARE PAUSED” ~ Cryptsy Website 

After scores of forum posts that the exchange was not authorizing any withdrawals and not responding well to support requests, people started speculating heavily. Media outlets had reported that maybe Cryptsy had folded like the infamous Mt. Gox. On January 5th, before the phishing attempt, it was reported that the platforms trading engines were halted. Then the Bitcoin publication Bitcoinist broke the news that the Cryptsy offices located in Delray Beach, Florida had been vacated.

Meanwhile, our anonymous source said Project Investors, Inc. had left for a while now and commercial management says they’ve been gone for a month. Then tales of Big Vern in the midst of a divorce also had his home on the market. Signs all around the exchange do not look good, and a vast majority of the public believes Cryptsy is defunct.

There is now a class action lawsuit against Cryptsy from someone who had deposited 84,000,000 Doge and tried to withdraw the cryptocurrency from the exchange. The plaintiff Jinyao Liu is suing Cryptsy and the pseudonymous Big Vern for over $5 million USD. The suit against the exchange is represented by Jinyao Liu and others suffering from the same hardship. They all cannot withdraw from Cryptsy, and the filings represent the interests and costs of many people throughout various states.

To this day, neither Big Vern or Cryptsy associates have not come forward to address this situation. Many people believe that Crypsty has failed because it’s operating in the same fashion like every other fallen exchange. Below is some of the transcript from the lawsuit held against Cryptsy and Big Vern.  

What do you think about the Cryptsy’s woes? Let us know in the comments below!


Images courtesy of Crypto-graphics.com, Pixbay



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