In yet another lawsuit appeal, Coinbase has lost to its previous client that will presently continue on to a jury trial. The class-action lawsuit related to money laundering filed by the law firm Silver Miller against one of the biggest digital currency exchanges, Coinbase will be held in an open court rather than a private boardroom.
In Georgia, the Eleventh Circuit Court of Appeals attested the refusal of Coinbase’s case appeal by a lower court. The case all together essentially alleges that Coinbase aided the laundering of about $8.2 million stolen bitcoins that value in excess of 100 million US dollar today.
In July 2017, Paul Vernon, the CEO of now-bankrupt crypto exchange Cryptsy had been found guilty of stealing the digital currencies of his company’s users, who was later on ordered to pay $8.2 million in damages. The law firm Silver Miller was additionally engaged with the case blamed Coinbase for failing to prevent Vernon from departing suddenly with the client’s money.
Between the day and age of 2014 and 2016, preceding fleeing the nation, Vernon utilized his Coinbase account to change over all the stolen bitcoins into fiat. The continuous class-action lawsuit by the law firm likewise claims negligence in account oversight as expressed:
“Plaintiffs seek damages based upon the unlawful conduct of COINBASE in failing to properly monitor customer accounts that held investors’ money and ignoring its duty to investigate suspicious activities under U.S. anti-money laundering rules.”
The law firm, Miller is happy that the case will be a public trial, expressing:
“Coinbase’s ascension to the top of the crypto exchange heap has not come without missteps in its business practices along the way. We look forward to having Coinbase answer for its role in the millions of dollars in harm suffered by our clients.”
Coinbase attempted the arbitration route to negotiate by pointing out the client agreements for wallet signed by Vernon. In any case, a year ago, the court decided that the clients are not tied by an indistinguishable agreement from the CEO. Henceforth, the arbitration was canceled out. Coinbase appealed for this choice yet was denied by the district court.
The plaintiff Brandon Leidel, who was a client of Cryptsy claimed that Coinbase ought to have kept Vernon from laundering the funds by means of their wallet.
On Monday, the appellate court affirmed that:
“Leidel’s claims are viable, if at all, without reference to the User Agreements, as the duties Defendant allegedly breached were not imposed by those agreements.”