Categories: Bitcoin Entertainment

Florida Law Firm Files Two Lawsuits against Cryptsy and Bitcoin Savings & Trust

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Florida Law Firm, Silver Law, has filed lawsuits against two Bitcoin companies on behalf of users who claim damages due to either company negligence or intentional intent.

The Cryptsy lawsuit is the more interesting of the two, as Bitcoin Savings & Trust's Ponzi scheme was revealed so long ago even the SEC has officially dubbed it as such. Silver Law's press release unfortunately lumps the two companies together, even while the alleged actions of the two are far different.

Silver Law, on behalf of its client, Skye Bonow, accuses Cryptsy of exaggerating its security protocols and blames the exchange for Bonow's loss of 140 BTC. According to the Silver Law's claims, Mr. Bonow alerted Cryptsy that his Bitcoin had been transferred to other Cryptsy accounts on January 27 but had not been moved out of the system (and Cryptsy's reach) yet. Instead of freezing the offending accounts, Cryptsy allegedly allowed the users to withdraw the ill-gotten cryptocurrencies out of the Cryptsy system and out of their reach months later.

The lawsuit also alleges that Cryptsy made claims that each user's account would be independently secured and would be unique to each user. This, they allege, was false and therefore Bonow was “deceived” into depositing his money into Cryptsy. In the lawsuit, Cryptsy is accused of violating Florida’s Deceptive and Unfair Trade Practices Act and the terms “fraud,” “fraudulent,” and “defraud” are mentioned 11 times. Silver Law and Bonow are seeking US $180,000 which represents the treble value of his claimed US $60,000 in losses.

It should be an interesting case to watch, with some possibilities to set precedent on how Digital Currencies supposedly owned by users but technically held by other parties are handled under the law.

The Bitcoin Savings & Trust news is a bit less unexpected. The company was long known to be a scam and represents one of the early major Bitcoin scams that made headlines. Bitcoin Savings & Trust was launched back in 2011 by Trendon Shavers and promised an insane 7 % weekly return on investments.

As anything that sounds too good to be true usually is, the entire thing came crashing down and was revealed as a Ponzi scheme during an investigation by the SEC. According to the SEC and the Silver Law lawsuit, Bitcoin Savings & Trust used new investments to pay back promises made to earlier investors. That is your basic Ponzi Scheme 101.

Silver Law asks that anyone who feels they have been wronged by either company contact them. Silver Law offices were not open for business hours at the time of this writing, but we will reach out to them for comment when their offices open and will update this space appropriately.

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The Cryptsy lawsuit is the more interesting of the two, as Bitcoin Savings & Trust’s Ponzi scheme was revealed so long ago even the SEC has officially dubbed it as such. Silver Law’s press release unfortunately lumps the two companies together, even while […]


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