Crypto startup Glow Token has filed a lawsuit against Crypto.com in a Florida court, alleging that the major exchange enables scams on its platform.
The startup is seeking over $250,000 in damages, alleging that Crypto.com breached its contract by failing to prevent the startup from being scammed. The startup acknowledges that the exchange may not have been directly involved in the fraud, but it argues that Crypto.com should have adequate security protocols.
After months of discussions and document exchanges, Lawrence transferred money to an account he thought belonged to Crypto.com. However, officials from the exchange later informed Lawrence in March that he had fallen victim to a scam.
Crypto.com denied having a listing agreement with Glow. On the other hand, Lawrence insisted that he had taken precautions to ensure the deal was legitimate.
“I conducted my due diligence and directly verified every step with Crypto.com,” said Lawrence in a statement posted on his X account.
“This included checking the listing link on their website, reviewing all received emails, confirming all the contact information I was provided, accessing the communication platform required by the listing agent, examining the actual listing contract, and all the details [were] verified by multiple representatives from Crypto.com.”
According to Lawrence, he had sent the scammers $250,000 plus one Bitcoin, valued at $23,000 at the time. As precautions, he saved copies of all conversations with the alleged Crypto.com representatives.
“I had taken precautions and saved copies of all conversations, as I would in any verification process.”
Bryan Lawrence, CEO of Glow Token LLC.
In the filing, Lawrence mentioned he founded the company to give back to the community and educate people about the positive impacts of DeFi. He also took a stand against “bad actors” in cryptocurrency early on.
Lawrence admitted that the recent case caused him to struggle with his health and finances. He talked about how significant stomach issues had hospitalized him four times. Apart from his illness, Lawrence said he had to sell his house to cover all court and work costs. After sharing his case, he received supportive messages and comments on X.
“I woke up this morning to seeing all of the messages and comments and it honestly had me tearing up and I’m still at a loss for words,” he wrote.
A user by the handle @TonySemperFi03 shared how Lawrence was a “good guy with good intentions.” He reminded Lawrence to keep his head up and his mental health good. Another user that goes by @safemoon_mann commented that Lawrence’s “verifiable copies of all the communications with crypto dot com” could be solid legal footing.
Previous fraud cases also used the names of major crypto platforms, such as phishing attacks on Coinbase users earlier this year. However, the Glow lawsuit differs from others in seeking to hold the crypto exchange legally responsible for the scam.
The Glow lawsuit is just one example of the many scams involving crypto exchanges and digital wallets. Even experienced crypto operators can fall victim to these scams. Experts suggest investors practice more caution when trading on crypto exchanges. They must perform thorough research on the exchange, verify claims and get a second opinion before investing.
The newly launched crypto scam tracker from the California Department of Financial Protection and Innovation (DFPI) can help consumers identify and avoid crypto scams.
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