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Bitcoinica sued for $460,000 by 'out-of-pocket' punters

Virtual bank accused of holding onto dosh after heist

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The operators of a website that earlier this year reported that a hacker had stolen units of virtual currency worth hundreds of thousands of pounds are being sued by four users that claim to be owed more than $460,000.

According to documents submitted to a US court, four users of the Bitcoinica website have sued those involved in running the site, claiming that they have "knowingly and willfully conspired and agreed upon themselves to hinder, delay and deprive" them of their right to withdraw their money from the site.

In addition the four users claim that those involved "acted willfully and with the intent to cause injury" to them and that therefore they had been "guilty of malice, oppression and/or fraud in conscious disregard" for their rights and should be liable to pay "punitive damages".

In May the Bitcoinica site, which allowed users to trade real currency for virtual Bitcoin units (BTC), announced that 18,547 BTC had been stolen by a hacker of its systems. Currently a BTC is worth approximately $10. The operators said at the time that it would honour all "withdrawal requests" from those that had made deposits via its exchange. It subsequently announced that those making such claims would be provided with 50% of what they claimed in an initial payment.

More than 43,000 BTC were reportedly stolen from Bitcoinica following a hacking incident in March.

Since the second breach Bitcoinica has remained closed to trading whilst "the transitional process" for upgrading the exchange "to a professional level of security" is completed. The four users have only been able to withdraw half their money from the site and are claiming that those involved in running the site have acted in breach of contract by failing to repay $460,457.20 they claim they are still owed, according to the court documents.

Copyright © 2012, Out-Law.com

Out-Law.com is part of international law firm Pinsent Masons.

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