• According to a court notice, additional compensation is available for Cryptsy victims

  • Those who lost money in a 2016 crypto exchange heist in the United States may be eligible for additional compensation.

    Some former users of the now-defunct cryptocurrency exchange Cryptsy received notice last week of a new development in the ongoing class settlement process. The document, which was authorized by the United States District Court for the Southern District of Florida, states that those who were defrauded in the 2016 collapse of the digital finance platform may be entitled to additional recovery.

    Cryptsy was a cryptocurrency exchange that went bankrupt in January 2016 after months of user complaints about difficulties withdrawing funds from the platform. The court later determined that Cryptsy founder Paul Vernon stole millions of dollars in digital assets from customers before fleeing to China. Later that year, a group of the exchange’s users filed a class action lawsuit against the company and its founder, and Cryptsy went into receivership.

    The court-appointed receiver began liquidating various assets associated with the defunct company, amassing approximately $1.5 million by June 2017 for distribution among the victims.

    The receiver and class representative then filed a second lawsuit against Coinbase, alleging that the company aided and abetted Vernon’s actions by allowing him to convert the stolen funds to US dollars. Almost three years of litigation culminated in a class action settlement in January 2020, when Coinbase agreed to pay out nearly $1 million to defrauded Cryptsy account holders.

    The most recent notice is for yet another round of recoupment of swindled funds. Legal action against Paul Vernon’s girlfriend, Xiuxia Liu, resulted in the victims’ representatives obtaining an additional $875.000 on behalf of the class.

    The funds will be distributed proportionally to those who filed valid claims in the previous two settlements, or who filed a valid claim in the Liu settlement by January 12, 2022. According to the notice, payments are expected to begin on or before February 20, 2022.

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