Did Paul Vernon (Cryptsy CEO) Steal from his own exchange?

Cryptsy CEO Paul Vernon Stole from Exchange, Court Papers Alleges

A recent development in the case alleges that Cryptsy CEO, Paul Vernon, or Big Vern, exchanged $3.3 million of cryptocurrency from the exchange to his and his wife’s bank accounts. This statement comes a receiver involved with the class action lawsuit continuing since the closure of cryptsy on January 16, 2016 from this CoinDesk article.  This update can drastically alter the direction of the case, being that Vernon may be in possession of funds from the exchange. With recent thefts such as the Bitfinex hack, tensions are high in the Bitcoin community. Although there is more known about the Cryptsy hack than the Bitfinex hack, these thefts have deterred investors from using exchanges in the meantime.

Paul Vernon Denies Theft Claims

Paul Vernon sent a statement to CoinDesk in response to their article alleging his theft of user accounts. He maintains his innocence from illegal wrongdoing, citing it as a “small” mistake. Although it may make sense to believe that he mixed mixed up personal and business accounts, his company was no small business and $3.3 million is no small amount of money. It’s hard to believe that Paul Vernon did not act in impropriety when mixing these accounts. The brief statement and article can be accessed on CoinDesk, with his most important quote being:

“One mistake that was made, which is a common mistake in small business, is mixing personal and business accounts.”

We’re not clear why CoinDesk didn’t release the full statement from Paul Vernon, considering it was to maintain his innocence. This comes close to the date when the case’s judge grants a class action lawsuit to make it easier for affected users to get their money back, if ever.

Paul Vernon Remains a Tough Man to Communicate With

According to CoinJournal, Paul Vernon may be residing in China, going so far to assist in the creation of an exchange there. The exchange, Bitebi9, is currently inaccessible. Although the article stated that whois searches and bitcointalk investigators helped draw the parallels in code and programmers to cryptsy. Some say there are no coincidences and Vernon’s lack of communication make this more difficult to digest.

The Road Ahead for Cryptsy and Paul Vernon

It is not clear what will happen in the future, but many will continue to be suspicious of exchanges. It is clear that many prominent and (at the time) trustworthy exchanges have fallen prone to hacks and preconceptions. It is clear that suspicions will run high, especially when it comes to exchange transparency, as the biggest exchanges are becoming bigger as the market consolidates. These questions of embezzlement have the possibility to rock the core of the Bitcoin community. If you used Cryptsy, stay tuned for updates about the class action and check CoinDesk for the latest updates, as they write more often than us!

Cryptsy was regarded as the most important altcoin exchange since it’s founding in 2013. It promised a “safe and secure place to trade cryptocurrencies”, yet a recent hack in January 2016 has stopped trading on the exchange since. We wrote on the cryptsy hack here. More about Bitcoin articles here

What does this mean for Cryptsy?

Cryptsy doesn’t have much of a future. It’s website is a dead link and we haven’t heard much from Paul Vernon since some interviews a couple months back. It would make sense that he will defend his choices, denying any wrong doing, but also admitting certain mistakes. Only time will tell where this develops.

While Cryptsy didn’t last long, it is still considered a turning point in altcoin exchanges, offering more than 100 pairs to exchange between. This opened the market for many altcoin exchanges. Despite this, many altcoins are nothing more than a fad, but with the popularity of Ethereum, DASH, and others, the future is bright for altcoin exchanges, despite their shaky past.

 

Michael

We believe Bitcoin has importance past it's monetary value. Decentralized systems have applications beyond economic theory. Keep following us, even if everything we write doesn't interest you our plan is to keep you interested. The future is now!

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