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justice, law, crime

Cryptsy Class Action to Settle With Ex-Wife of Troubled CEO

November 1, 2016 at 12:30 PM | By Jit Sutradhar Crime

justice, law, crimeThe plaintiffs in a class action lawsuit filed after the collapse of Florida digital currency exchange Cryptsy are moving to settle with one of its defendants.

Lorie Ann Nettles, the former spouse of Cryptsy CEO Paul Vernon, was named as a co-defendant in the class action, which was initiated in January. The lawsuit was filed after the now-defunct exchange claimed that it had been hacked two years prior, leaving it with millions of dollars in customer liabilities.

Cryptsy’s collapse followed months of growing problems with customer withdrawals. Vernon later claimed that the exchange’s insolvency was hidden in order to prevent panic among users.

Nettles’ role in the dispute stems largely from a divorce settlement agreement between her and Vernon, which included a home in Palm Beach County, Florida, valued at more than $1m. That property, along with other assets including a diamond ring and a motor vehicle, are set to be sold for the benefit of class action members, filings reveal.

An attorney for Nettles was not immediately available for comment.

Plaintiffs claimed in the suit that the assets were purchased using monies taken from Cryptsy users. Though Nettles pushed back against the allegations at first, the two sides ultimately entered mediation, resulting in the agreement currently before the court.

If approved, the settlement would mark the beginning of what could become a longer, more protracted process.

Vernon, who has blasted the class action lawsuit and the legal team behind it, is believed to be residing in China. According to the plaintiffs, his location and lack of official response to the suit complicates the process moving forward.

They argued in the latest filing:

“As a result, even though a Default has been entered against Vernon, recovering any relief from him will likely require extensive, costly and time-consuming post-judgment litigation to locate and secure assets, even assuming such assets could ever be located, seized and converted into US dollars.”

Other assets set to be sold in the event of a finalized settlement include cryptocurrency holdings currently under the control of court-appointed receiver James Sallah, as well as additional “personal property” accrued during the process.

Of the amount collected, an unspecified amount will be given to Nettles to “provide basic living necessities for herself and her children”.


Article Source: http://www.coindesk.com

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