insider theft, Rug Pull
Days in Operation:
100 pts each
In early 2015, the then-struggling exchange Cryptsy has announced that it could file for bankruptcy as it is already insolvent due to a hacking incident that cost it around 13,000 Bitcoin and about 300,000 Litecoin. The exchange claimed that unless the funds are recovered or an investor can cover the losses, its site will be shuttered and it will declare bankruptcy. The Court further declares that the 11,325.0961 [Bitcoin] which were stolen from Cryptsy customers on July 29, 2014, and which, as of the date of this final judgment ... are property of the Plaintiff Class and subject to and encompassed within this Final Judgment. According to the Indictment, Paul E. Vernon solicited and caused cryptocurrency investors to trust the safety of Cryptsy, an online cryptocurrency exchange company, for storing and trading their virtual currency. Vernon exercised control over cryptocurrencies deposited on the Cryptsy website. Between May 2013 through May 2015, Vernon used his control over Cryptsy’s accounts, known as wallets, to steal over one million USD from Cryptsy’s cryptocurrency wallets. Once Vernon stole his customers' funds from Cryptsy’s wallets, he deposited the funds into a personal cryptocurrency wallet and then transferred the same funds into his personal bank account. On about July 29, 2014, Vernon informed Cryptsy employees that Cryptsy had been hacked by an unidentified party, and that the hacker had stolen more than five million USD’ worth of bitcoins and other cryptocurrency from Cryptsy.
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