Silver Law Group Defending Thousands of Investors in an International Fraud Case Against Cryptsy CEO

Paul Vernon’s former clients say he stole millions from Cryptsy, which traded Bitcoin and other digital currencies, and then fled the country with $8M in investor funds. Now we’re representing them in a class action lawsuit.

Paul Vernon, CEO of Project Investors Inc., which does business as Cryptsy, a Delray Beach-based digital currency exchange, fled to China with $8 million dollars in client money, allege a group of international investors we’re currently representing in class action suit that was certified by U.S. District Judge Kenneth Marra in West Palm Beach on August 24.

In 2015, Vernon notified Cryptsy clients that software problems were causing the company to pause all electronic wallets. That December, he notified them of a phishing scam targeting the site. Plaintiffs alleged that Vernon shut down the exchange and stopped responding to client inquiries in late 2015.

The allegations against Vernon include conversion, negligence, unjust enrichment, civil conspiracy, fraudulent conveyance and other charges. Tracking down the company’s assets before they disappear has been critical focus since the lawsuit was filed. A court-appointed trustee has been engaged to track down Cryptsy’s holdings.

Class lawyers realize that one of the focuses of this case, aside from the lawsuit itself, is to locate lost victims’ funds before they disappear. Silver Law Group has already uncovered the Delray mansion as one of the fraudulent purchases made with the Cryptsy money transfers. The home has since been transferred to Vernon’s ex-wife Lorie Ann Nettles (as part of a divorce settlement) who is now also named as a defendant in the case.

Marra’s court-appointed receiver launched a forensic analysis of Cryptsy’s digital records and filed a motion against Vault Networks, the company that hosted the firm’s servers. Reports claim that Vernon liquidated the company to purchase the Delray mansion in 2015 as well as a $100K diamond ring from Tiffany & Co. and a $82K Infiniti automobile.

The receiver’s report also alleges that Vernon or someone working with him engaged in sabotage to deter investigations in the class action suit—remotely logging into the database and destroying all of the data in three shred commands. The receiver’s attorney continues his search for Cryptsy’s electronic wallets and has already tracked a digital currency with a market value of about $600,000.

So our work is just beginning.

Silver Law Group has extensive experience advising clients regarding their options about participating in a class action or opting out the class action and instead pursuing their individual claims as stand-alone plaintiffs against a variety of potentially liable defendants. There are advantages to both options, depending on the factual scenario in which they arise; and we carefully advise our clients regarding which path would best suit their legal interests.

If you have been defrauded by Cryptsy, Paul Vernon, or any investor, contact us now for a free, no obligation consultation with one of our experienced attorneys.