Business 5 October 2018

Erik Gibbs

Mt. Gox users want California judge to stay lawsuit until February 2019

One judge in the United States has already ruled that investors who lost money in the Mt. Gox hack won’t find any recourse on U.S. soil. This hasn’t stopped others from trying, though, and a case in California is now waiting to be heard by a federal judge to determine if victims of the failed exchange can seek financial relief. However, investors are now asking the court to stay the case until next February.

Reuters reported that the plaintiffs in the case, which was launched by Joseph Lack, and Mt. Gox financial partner Mizuho Bank have asked the judge to put the case at the bottom of the pending cases stack. They want to wait until at least February 28, 2019, in order to give everyone time to find out if the current payout schedule offered by the exchange’s trustee, Nobuaki Kobayashi, is going to be fulfilled in its entirety or only partially. Once all parties are able to understand better the schedule, they say that they will be in a better position to inform the court how to proceed.

Kobayashi announced last month that he had sold a significant amount of Bitcoin Core (BTC) to raise $617 million in order to make restitution. The amount is expected to be able to cover all of the losses and not just provide partial compensation, as had previously been expected.

The trustee added that the Mt. Gox estate also has under its control another 137,000 BTC. According to current conversion rates, this equates to around $896.6 million. When the purported hack took place in 2014, an estimated $450 million was allegedly stolen.

Lack introduced the lawsuit following a loss of $40,000 that he had given to Mizuho Bank as a deposit to be applied to his account with Mt. Gox in 2014. That deposit was never entered into his account and he never recovered his money. The timing of the deposit coincided with the issues seen on the exchange, which abruptly shut down on February 7, 2014.

Mizuho has already made attempts to have the lawsuit thrown out. It claimed two months ago in a court appeal that the money transfers it received on behalf of customers in California were only “passive” and that it was not liable for anything that had transpired. The courts tossed the appeal, calling them unconvincing.

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.

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