Paul borrowing from Peters to pay Dicks-on??
Newnote sued by Cointrader.net customers
2017-09-13 10:44 ET - Street Wire
by Mike Caswell
Newnote Financial Corp. and its chief executive officer, Paul Dickson, have landed in a heap of litigation over the demise of Newnote's bitcoin trading site, Cointrader.net. At least three customers have filed lawsuits against the company over lost bitcoins. For its part, Newnote denies that it owes the customers anything, and says that it shut down its bitcoin site after a security breach.
The lawsuits come after the shutdown of Cointrader.net in March, 2016. Just one year earlier, Newnote had acquired the site for $1.5-million in cash and shares. When it announced the acquisition Newnote touted the site as a "leading North American bitcoin exchange" and said it was signing up over 1,000 new users per month. The site was processing more than $1.5-million in bitcoin transactions each month as well, the company said.
Newnote then abruptly shut the site down on March 29, 2016. It cited rising maintenance costs and lower trading volume (and at the time made no mention of any security troubles). It said that users with balances remaining were "being settled" and would have their accounts closed. It appears that the shutdown has not been going entirely smoothly, however. More than one customer has taken the company to court seeking the return of bitcoins.