Court Documents Show Cryptsy CEO Predicted Exchange Would Fail

February 26, 2016 | Back to News

David Silver Quote:

A legitimate company would be addressing these issues head-on, and my question is, where is anyone from Cryptsy to address this lawsuit that has been going on for a month now? “Where is Paul Vernon?”

Weeks before disclosing that the digital currency exchange Cryptsy was insolvent, CEO Paul Vernon told a Florida divorce court in a financial affidavit that he expected the operator of the exchange to fail.

The affidavit was filed on 22nd December – less a month before Cryptsy would go on to claim that it had been the target of a debilitating hack in 2014 that left it insolvent and with millions in customer liabilities.

At the time, Vernon said that the exchange, which largely focused on alternative cryptocurrencies, had been able to stay afloat thanks to fee income, but that profits had dried up, leading to the exchange’s collapse. Activity on Cryptsy remains frozen, with no customer update since 1st February, according to a notice on the exchange’s website.

The affidavit, filed amidst a months-long divorce case, shows that Vernon indicated his belief that Project Investors, the operator of the exchange, would “dissolve” in the near future because of a drop in exchange income.

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