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Coinbase to pay out almost $1m to Cryptsy victims

By Charlotte Ricca

US exchange accused of aiding thieves and laundering $8.2m in crypto

Coinbase has agreed on a $962,500 settlement to former customers of the defunct crypto exchange Cryptsy.

Cryptsy filed for insolvency in January 2016 after it lost 13,000 Bitcoin and 300,000 Litecoin during a hacking attack, 10,000 BTC of which belonged to its clients.

The victims filed charges against Cryptsy founder Paul Vernon over his alleged negligence, unjust enrichment, aiding and abetting conversion and violation of Florida’s Deceptive and Unfair Trade Practices Act.

The plaintiffs also created a website, inviting other victims to submit their claims.

Coinbase, the largest crypto exchange in the US, was accused of helping the thieves get away with the stolen money and laundering $8.2m in crypto.

A three-year lawsuit followed as Coinbase tried to dismiss the case and settle through arbitration. This was refused by an appeals court.

The exchange finally negotiated a settlement of $962,500 last month, according to two court documents dated November 27 and December 10.

A hearing will be held on April 17 2020, to either approve or modify the preliminary settlement agreement.

David Silver of Silver Miller, who originally represented the plaintiffs, reportedly commended Coinbase "for stepping up and resolving" the case.

FURTHER READING: Coinbase Wallet may remove DApp browser to comply with App Store policy

FURTHER READING: Qatar bans crypto trading

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