Business 29 August 2018

Erik Gibbs

Mt. Gox CEO wants to have US lawsuit thrown out

While the trustee in charge of managing the Mt. Gox scandal, Nobuaki Kobayashi, is preparing to make it easier for investors to claim their losses, the cryptocurrency exchange’s former CEO, Mark Karpeles, is having to respond to a number of lawsuits. One of the lawsuits was launched in Illinois, but Karpeles has turned away from the suit, arguing that the U.S. courts have no jurisdiction over him.

Karpeles is routinely seen as a possible culprit behind the 2014 hack and subsequent loss of around $400 million in BTC. Through his lawyers, he told U.S. District Court Judge Gary Feinerman that he has no connection to Illinois and no business in the state. As such, he cannot be held accountable for any actions by the Illinois courts.

The judge had previously named Karpeles as the lead defendant in the case on August 13. He gave Karpeles until last Friday to respond to his order, and his attorneys obliged, just beating the deadline. In their motion, the lawyers asserted, “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.”

They also argued, “Plaintiffs bear the burden of establishing personal jurisdiction. Blanket, conclusory assertions that this court has personal jurisdiction are insufficient…[Karpeles hasn’t] purposefully directed his activities at the forum state or purposefully availed himself of the privilege of conducting business in that state [nor] alleged injury arise out of the defendant’s forum-related activities.”

Karpeles, a French national who now lives in Japan, once led the largest cryptocurrency exchange in the world. Everything came to a crashing halt in 2014 on the news that the exchange had been hacked and virtually all of the digital assets were wiped out. While it was never proven, there were indications that the hack was nothing more than a cover up of possible embezzlement, with Karpeles being the prime suspect.

The claims program established by Kobayashi will allow investors to submit proof of their involvement with the exchange in order to collect compensation. Kobayashi is in charge of managing the exchange’s current holdings, which are approximately $950 million. Claims must be filed by October 22, and the results will be made available on January 24, 2019.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

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