A trader has sued the custodial service Xapo and the Indodax cryptocurrency exchange for storing 500 stolen BTCs. Services are accused of indirectly promoting fraud.

The lawsuit was filed in the District Court of the Northern District of California by a resident of Germany Dennis Nowak (Dennis Nowak). He claims that he had previously stolen 500 BTC, which are now on these sites.

According to Novak, Xapo and Indodax knew that they did not impose sufficiently stringent requirements for undergoing an Identity Identification Procedure (KYC) and did not properly comply with anti-money laundering (AML) rules, which contributed to the commission of illegal actions.

According to the lawsuit, on November 20, 2018, Novak moved 500 BTC to an unnamed U.S. exchange, and on November 23, a certain “John Doe” stole these funds. The cyber security company Kroll, which discovered that the thief did not try to hide the stolen funds, investigated the case - 19.99 BTC were transferred to Xapo, and the remaining 479.69 BTC - to the Indodax exchange.

The trader demands that the services return his bitcoins, which at the time of the theft cost about $ 2,300,000, and also pay additional compensation for not taking measures to return the stolen funds.

Recall that in August, the custodial service for institutional clients of Xapo was purchased by the Coinbase cryptocurrency exchange.