A class action lawsuit has been filed in Florida against AltCoin exchange Cryptsy and Paul Vernnon for misappropriating funds and denying account holders access to their accounts. The complaint specifically names:

PROJECT INVESTORS, INC. d/b/a CRYPTSY, a Florida corporation, and PAUL VERNON, an individual,

The class action  was filed in Florida Wednesday and is all of about 22 pages long.

This nationwide class action is brought by Plaintiff, individually and on behalf of a class of similarly situated users (the “Class Members”) of PROJECT INVESTORS, INC. d/b/a Cryptsy. At all material times, Defendants operated an online business for general consumers and the public to exchange, invest, and trade in digital cryptocurrencies. Plaintiff seeks damages based upon the unlawful conduct of Defendants in denying account holders the ability to obtain funds in their accounts and in misappropriating funds held in the CRYPTSY accounts.

It goes on to accuse

In essence, CRYPTSY and VERNON are one-and-the-same. CRYPTSY is an “alter ego” of VERNON, who dominates and controls the corporate entity to further an unlawful scheme and to further VERNON’s own personal financial interests

As evil as that may sound, it is fairly standard wording for a suit such as this. However, this one is pretty big:

CRYPTSY is registered with the Financial Crimes Enforcement Network (“FinCEN”) as a Money Services Business. CRYPTSY, as a Money Services Business, is obligated to keep certain financial records and allow free and unfettered access to consumer accounts. As demonstrated below, CRYPTSY has failed to do that

Not only would that be rather damaging, it would also open "Big Vern" up to federal scrutiny and potential charges including fines and even jail time. The complaint goes on to list the piles of virtual currency that is locked away on the Cryptsy platform while the organization has given little to no update as to what is going on.

So Now What? 

This is a class action civil suit and is likely just going to be settled out of court, nobody ever actually wants to fight it out in court, that's just what is generally takes to get people attention. 

You can read the entire complaint here: http://www.scribd.com/doc/295469378/Complaint

One thing is for certain. I for one would like to see this resolved. I haven't been able to login since November.

Story by dinbits
Image courtesy Cryptsy

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