There have been few new developments in the ongoing class action lawsuit against the now defunct cryptocurrency exchange, Cryptsy. The Bitcoin exchange based out of Florida stopped its operations earlier this year. At the time of shutting down, the platform allegedly had accommodated liabilities of over $10 million, of which $5 million belonged to the customers. The class action lawsuit was filed by disgruntled Cryptsy customers with an intention of recovering at least a portion of their lost funds.
Until now, there wasn’t much progress in the case as one of the defendants, Paul Vernon — the founder of Cryptsy — has been on the run. While Vernon is suspected to have fled to China to escape prosecution, it can’t be said the same to his ex-wife who is said to have entered into a settlement with the plaintiffs. A recent legal document filed with the United States District Court for the Southern District of Florida reflects the class action settlement between Lorie Ann Nettles and Brandon Leidel, Michael Wilson and other plaintiffs who are part of the lawsuit. The settlement amount is estimated to be around $1 million.
Nettles became part of the class action lawsuit after the plaintiffs concluded that she was a beneficiary of ill-gotten Cryptsy’s customer funds in the form of a Palm Beach County waterfront property worth $1.375 million. The property in question was transferred to Nettles as part of a divorce settlement between her and Vernon. The preliminary settlement between Nettles and the plaintiffs was mediated by Judge Howard Tescher.
Terms of the arguably unfair settlement require Nettles to hand over/liquidate the following assets whose proceeds will go towards the Settlement Fund. The assets include
- A diamond ring
- The Palm Beach County property
- All monies received from the sale of the cryptocurrency holdings
- All monies received from the sale of personal property belonging to Nettles
- All monies received from the sale of Infiniti QX60 automobile belonging to Nettles
- Any other asset and monies obtained by Plaintiff’s lead counsel
The settlement terms allow the attorneys to charge a maximum of 33.33% of the total value of the settlement fund. In the case of attorneys’ fees exceeding the above-mentioned percentage, they will be required to reduce it to meet the requirement. After handing over all the assets, Nettles will be left with just enough to provide basic living necessities for herself and her children.
While the customers of Cryptsy are entitled to recover their lost funds, the whole exercise of the settlement between Nettles and Plaintiffs appears to go against natural justice, making one person a scapegoat for the whole fiasco. The Plaintiffs and the US Court seems to have forced this settlement out of desperation as they fear that they won’t be able to recover the cryptocurrency and other related assets, right now in the possession of Vernon.
Even though the terms of the settlement are still subject to final approval, it shouldn’t be a problem as the court is expected to approve it.
Ref: Court Document | Image: NewsBTC