Report: Coinabul faces class-action fraud suit over bitcoin-to-gold business

San Diego-based bitcoin-to-gold marketplace Coinabul is now facing a class-action lawsuit over claims it failed to fulfill “thousands” of orders and did not return customer funds. The suit was launched by Yazan Hussein, who says he sent 1,644.54 BTC to Coinabul last year for a transaction the company has yet to settle. The suit was filed last month, and is being handled by Edelson Law, which is also the counsel for the class-action suit against Mt.Gox.

Speaking with CoinDesk, Edelson partner Chris Dore said that Hussein filed the case after a year of attempts at resolution with Coinabul. After an investigation of Hussein’s claims, Dore said that his firm realized problems with Coinabul were far more widespread. “There are countless complaints of people having the same experience where suddenly they stopped responding and stopped sending any product in exchange for the bitcoins. We did file it as a punitive class action and we do intend to pursue it as a class.”

According to the plaintiffs, Coinabul has continued to accept orders for gold, even though it appears to have stopped shipping orders in June of 2013. The suit also alleges that Coinabul accepted orders for metals it did not have in stock, and failed to return customer funds when orders could not be fulfilled. Coinabul’s fulfillment issues are well known within the bitcoin community, and the company’s various reasons for its inability to deliver products or refund money are well documented. Coinabul’s social media presence has been non-existent since early 2013.

There is no hearing date set for the filing, but CoinDesk has reported that Hussein is seeking a jury trial.