Mt Gox CEO Mark Karpeles Asks US Court Drop the Fraud Lawsuit

Once again unlucky CEO of the despoiled exchange got under the fire as his former U.S. customers brought on a fraud lawsuit to the federal judge in the state of Illinois.

Photo: Neil R / Flickr

Photo: Neil R / Flickr

Albeit it has been a long time since one of the greatest heist in the cryptocurrency history took place, the repercussions were so significant they are still nourishing daily tabloids. Indeed, hardly everyday someone gets robbed for nearly $7B in current day prices.

Nowadays the owner of a bankrupt exchange Mt.Gox, Mark Karpeles is in the middle of several legal proceedings where he acts as a lead defender against the claims filed by furious creditors. Yet Karpeles reckons not every single claim is to be approved.

Let us remind that Mt.Gox was initially launched in Japan by a Frenchman living in the country. Nevertheless, at that time the exchange was listed in a line with the most powerful digital platforms for cryptocurrency trading based on the amount of transactions turnover. It is obvious, Mt.Gox had non-Japanese users amidst the clientele, especially considering the fact there were no residential restrictions imposed on the exchange.

However, when the Mt.Gox former customers brought up a fraud lawsuit to a U.S. federal judge in the state of Illinois, Karpeles has urged to dismiss a case insisting that the U.S. court has no personal jurisdiction over him in Japan.

Representatives of Karpeles spoke with U.S. District Court Judge Gary Feinerman and stated that their client has insufficient relations in Illinois, and his business did not operate in the state to explain a lawsuit which accused the ex-CEO of conversion, negligence, and fraud, as stated in Law360.

According to the Feinerman court direction, Karpeles was appointed to face an entry of default claim made by the U.S. customers. The former CEO was given time until Friday, August 24, to counter the request for entry of default at a hearing, which was arranged on Tuesday, August 28. On that exact date, Karpeles’ attorneys submitted a motion to discharge the case, stating that he lacked the “minimum contacts” required for establishing ties in the state.

In an excerpt from the motion to dismiss the claims against Karpeles, his attorneys said:

“Mr. Karpeles expressly asserts that this Court lacks personal jurisdiction over him and preserves this objection and argument for all purposes…Because this Court lacks personal jurisdiction over Mr. Karpeles, this proceeding against him must be dismissed with no further actions taken, including but not limited to the entry of any default.”

Further the attorney stated that Karpeles has neither purposefully directed his activities at the forum state, nor purposefully availed himself of the privilege of conducting business in that state. Kaples himself shifted the burden of establishing personal jurisdiction on plaintiffs, saying his name shouldn’t appear in the suite at the first place.

Notably, the other day Coinspeaker reported Mt.Gox trustee assigned to clear the reimbursement process has rolled out an online claim filing system available for creditors. Mt Gox creditors were requsted to file settlement claims with a deadline on October 22, then all the claims will be revealed by the trustee on January 24, 2019.

We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language, all capital letters or appear to be spam, and we review comments frequently to ensure they meet our standards. Views expressed in the comments do not represent those of Coinspeaker Ltd.