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Coinbase Agrees to Settle Year-Old Cryptsy Case at one Million Dollar

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The announcement was made by the plaintiff’s lawyer, stating that 11,325 BTC have been settled on Monday

Coinbase crypto exchange finally put an end to a yearlong lawsuit by agreeing to pay one million dollars. Essentially, Coinbase will pay the agreed amount to former customers of the now-defunct crypto exchange, Cryptsy.

Coinbase To Pay $962,500 to Cryptsy Victims

It was reported recently that the court document dated November 27, and December 10, 2019 details that the largest crypto exchange, Coinbase will hand over $962,500 to an escrow agent heading the case against Cryptsy. The announcement was made by the plaintiff’s lawyer, stating that 11,325 BTC have been settled

on Monday. More so, the plaintiffs shared a webpage for potential victims of Cryptsy, those who were using this trading platform before 2015. The webpage details key dates and proper procedures to submit claims.

It’s worth noting that the settlement acted as an end to a three-year legal action that almost had to have Jury trial, a lawful proceeding wherein a jury makes a decision.

The filing further notes that the hearing for the same case will be held on April 17 this year to further proceed whether to approve the preliminary settlement agreement or make further modifications.

Case in Brief

Moreover, the effort of the class representative, Brandon Leidel will be paid off. Accordingly, he will receive $2500 for his time and effort contributed towards Crypsy’s case. Noticeably, Leidel began the case 2016, alleging the fraud effort processed by CEO Paul Vernon.

According to Leidel, Cryptsy CEO Launder millions of dollar’s worth of his clientele fund. However, the exchange claimed insolvency in early 2016 which was followed by a supposedly hack incident of around 13000 bitcoin and 300,000 litecoin.

Following the hacking incident, victims censured Cryptsy Founder Paul Vernon over his alleged negligence. Later it was reported that the suffered users alleged that the hack was in fact not hack itself, rather it was stolen by Vernon and laundered through Coinbase. Consequently, in late 2016 Crypsy victims filed a case, accusing Coinbase of backing up Cryptsy founder of around $8.2 million worth of cryptocurrency.

Nevertheless, in late 2019, Coinbase came forth agreeing to pay Cryptsy victims $952,500 in the settlement, encouraging the case to end up. This being said the latest report reveals that the settlement will either be approved or have modification during a hearing scheduled on April 17, 2020.

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Former Coinbase CTO claims Nakamoto.com is a step towards changing culture

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I understand the rationale behind crypto-anarchy, but I believe in crypto-civilization,” said Balaji Srinivasan, founder of Nakamoto.com, when asked about the reason behind the formation of the now-controversial forum.

Srinivasan recently appeared on a podcast with Messari’s Ryan Selkis and spoke about Nakamoto.com, a project which after its release, has caused quite a stir. Srinivasan’s motivations behind the same stemmed from his interest in educating himself and others about the various gaps known within the community. Nakamoto.com has a list of contributors – right from the many big-shot names in the industry to technical gear heads and according to the website,

“We want to create a venue for quality technical, philosophical, and cultural writing that is of general interest to the crypto community as a whole, for beginner and expert alike.”

Even though the idea of the website is novel to Srinivasan, Selkis expressed his concern about the future, claiming that if/when it explodes, it might bring in similar chaos as Reddit did in the early stages of Bitcoin. However, the former CTO of Coinbase argued that it might act

more like a forum where the community can discuss various assets, with moderators helping keep the conversation going.

According to Srinivasan, social media may get more radicalized as it incentivizes people for their actions in terms of attention or money. He highlighted the culture offered by these platforms and claimed that “there is no guiding culture for Reddit.”

He added,

“Getting the culture right seems like a very good step with the launch of Nakamoto.”

Recently, a prominent Bitcoin Telegram channel changed its settings to read-only mode, with the moderators citing trolls and spambots. In order to put an end to the unhealthy culture, Nakamoto.com was created, as per the founder. However, he was highly criticized for the name, with many claiming that Srinivasan used Bitcoin’s creator’s name to just publicize his new venture.

Peter McCormack, a proponent of Bitcoin, had said,

“Any use of the Satoshi Nakamoto name to promote anything outside of Bitcoin is disingenuous AF!”

However, Srinivasan has received support from a few others like Ran NeuNer who asked the community to celebrate “another credible source that can drive adoption.”

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Coinbase-Led Crypto Ratings Council Plans Transparency Boost as New Members Join

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The Crypto Ratings Council (CRC), the Coinbase-led organization hoping to create a standard for assessing whether different cryptocurrencies are securities under U.S. law, is adding new members.

The group announced Thursday that eToro, Radar and OKCoin US have joined the aspiring industry group looking to streamline how exchanges assess whether a cryptocurrency is a security. The new members bolster the level of technical and legal information that the group can utilize, said Juan Suarez, a VP and general counsel at Coinbase working with the CRC.

Suarez told CoinDesk in a phone call that every CRC member reviews the ratings before they are made public, and each asset is listed by at least one of the group.

The CRC rates assets on a scale of 1 to 5, with 1 denoting cryptocurrencies that do not appear to have the characteristics of a security under U.S. law. Five new assets were rated Thursday: cosmos (ATOM) and livepeer (LPT) have both received a 3.75 score, while dash (DASH) and horizen (ZEN) received 1s and ethereum classic (ETC) received a 2.

In addition, the CRC will refine the explanations on its current list, Suarez said. The ratings themselves won’t change but the reasoning behind whether each asset resembles a security will be condensed.

“It just is a part of routine operations of the company that we’ll be changing,” he said. “We’re refining the bullet points to make them more factual and explicit.”

While its ratings indicate the CRC’s confidence that a particular asset resembles – or doesn’t resemble – a security, the group is not affiliated with the U.S. Securities and Exchange Commission, which to date has only stated that bitcoin and

ethereum are not securities.

As a press release puts it: “The CRC’s analysis is its own and is not endorsed by developer teams, regulators or any other third party.”

Public reveal

As part of its 2020 roadmap, the CRC plans to share details of the actual framework it uses to arrive at its evaluations. Suarez said the group plans to continue providing its analysis for any given asset, but releasing the broader framework may help the industry.

The current lack of transparency around how assets are evaluated was one major criticism of the CRC when the group was first unveiled. Industry lawyers told CoinDesk the initiative seemed a beneficial one overall for the space, but revealing the framework in particular would help non-member companies.

“We’re going to release the framework in the hopes that it creates a useful discussion for the industry and we’re going to recruit more members,” Suarez said. 

There’s also work afoot to address questions raised by current CRC members about the framework. Once those are finalized, the analytical framework will be released.

As part of this effort, several meetings are planned in the coming weeks, according to Suarez. 

“We just want to make sure we release the best and final work product possible,” he said. The plan is to make sure it’s “scalable and easy to use” by legal teams at exchanges.

By releasing the framework, the CRC may be able to create guidelines and best practices for companies and developers to look at. The end goal, according to Suarez, is to help crypto startups more easily comply with existing securities law.

“That’s kind of the North Star that we’re driving to,” he said.

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Coinbase Hands Nearly $1M to Cryptsy Victims After Settling Class Action Lawsuit

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Coinbase has settled a class action lawsuit brought by users of the former Cryptsy cryptocurrency exchange.

According to a set of court documents dated Nov. 27 and Dec. 10, 2019, Coinbase has agreed to turn $962,500 over to an escrow agent responsible for handling class action claims related to a previous lawsuit against Cryptsy. Lawyers for the plaintiffs, who announced the settlement Monday, have already won 11,325 BTC from this previous case.

The plaintiffs created a webpage for potential Cryptsy victims – any individuals who used the exchange before 2015 – listing upcoming key dates and outlining how they can submit claims.

The settlement concludes a three-year legal action that nearly saw a jury trial.

A hearing will be held on April 17, 2020, to either approve the preliminary settlement agreement or add further modifications as needed, according to the filing.

Brandon Leidel, designated the class representative in the class action lawsuit, will receive $2,500 due to his efforts. He brought the suit in 2016 alleging Cryptsy CEO Paul Vernon used the exchange to launder millions of dollars’ worth of user funds over a multi-year period.

The case

was originally filed by the Silver Miller law firm and Wites Law Firm, both of which were designated class counsel. In a statement, attorney Marc Wites said the case against Coinbase, as well as the previous lawsuit filed against Cryptsy, “were difficult cases” to resolve.

“When companies go out of business, founders flee the country and the amount at issue is relatively small, most plaintiff law firms would decline to pursue the case,” he said. “We were the only lawyers in the country to pursue a case against Cryptsy or Coinbase, individually or as a class action, and we were able to obtain multiple meaningful recoveries for victims who would have otherwise been left without any recourse.”

David Silver of Silver Miller said he commended Coinbase “for stepping up and resolving” the case. The Cryptsy case shows how early exchanges, “especially unregulated exchanges like Cryptsy, shunned regulators, laws and ultimately stole from its own clientele,” he said.

“This case shows that businesses in the cryptosphere bear a large measure of responsibility, from with whom they decide to do business and with whom they choose to associate,” he said.

Coinbase did not immediately return a request for comment.

Read the preliminary settlement below:

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