Cryptocurrency Startup Sues Crypto.com Exchange After Falling Victim to Scam
Cryptocurrency startup Glow Token LLC filed a lawsuit in a US court against the Crypto.com exchange over a recent fraud, alleging negligence and breach of contract.
The lawsuit was filed on August 10, assigned to Judge Jose Martinez of the Florida Southern District Court, and last updated on August 21.
The startup sued the exchange for breach of contract, negligent infliction of emotional distress, fraudulent inducement, negligent misrepresentation, vicarious liability, and unjust enrichment.
Earlier this year, Glow Token CEO Bryan Lawrence discussed listing the startup's Glow Token (FLARE) on Crypto.com with certain individuals claiming to be the exchange's staff.
Lawrence transferred funds to what he thought was a Crypto.com account: $250,000 and BTC 1 (then worth $23,000).
In March, Crypto.com told the CEO that there was no agreement about listing the coin and that he had been scammed.
The individuals he had been talking to were imposters posing as Crypto.com employees.
Despite Crypto.com telling Lawrence to stop claiming a listing agreement existed, Lawrence's lawyers argued in an August 17 letter that the legal action resulted from the failed listing of FLARE.
The letter claimed that it was either Crypto.com's employees or bad actors compromising the exchange's internal communications who caused the loss of investor money and harm to Glow Token's reputation.
"These bad actors took advantage of a lack of security protocols and safeguards by the defendant to allow compromise of their internal communication, resulting in the loss of funds earmarked for the [FLARE launch], originally scheduled [for] April 1, 2023."
Glow Token wants the missing funds returned and compensation for the harm caused to the CEO and the business.
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