Mt Gox former CEO Fights Class Certification Bid

The ex-CEO of infamous Japanese Bitcoin exchange Mt Gox – Mr. Mark Karpeles urged the Illinois U.S. District Court federal judge on Monday not to certify a class suit from plaintiff Mr. Gregory Greene that claims Mr. Karpeles misrepresented the exchange’s safety, security, and operation in the “terms of use” policy.

The class filing from Mr. Greene alleges that Mr. Karpeles misrepresented the company to customers, creating the “false impression that Mt. Gox was a safe and secure bitcoin exchange, despite his awareness of serious security flaws and other issues that eventually led to its collapse in February 2014.

Mr. Karpelese in his latest filling argues that there’s no commonality in his alleged conduct because Mr. Greene is basing his argument on exchange’s ‘term of use’ which did not exist when Mr. Greene created an account with Mt Gox.

Additionally, he argues that “the information that any individual user read, considered and relied upon is vastly different for each user”. He also mentioned in the submitted filling that Japanese civil rehabilitation is working on providing a “superior method of recovery” for creditors.

Background:

Mt Gox was a Tokyo-based cryptocurrency exchange that operated between 2010 and 2014. It was responsible for more than 70% of bitcoin transactions at its peak. The exchange declared bankruptcy in 2014, following the hack of the exchange’s hot wallet losing customer’s Bitcoins. This prompted the lawsuit from Mr. Greene in 2014. Since then, additional named plaintiffs and defendants have shuffled in and out of the case, eventually narrowing back down to Greene and Karpeles.

The lawsuit claims that while users were told their assets were held at Mt Gox, the exchange was the victim of undisclosed hacks and other data-security events that stole Bitcoin. The former CEO also manipulated the Mt Gox database by utilizing an automated trading bot to collect users’ bitcoins and cash using fake assets.