A U.S. federal judge has ruled that a proposed class certification for former clients of the collapsed Mt. Gox cryptocurrency exchange should not be granted, in a decision that comes as a boost for Mark Karpeles the former CEO. Karpeles was convicted of data manipulation in Japan and was ordered to serve two years and six months in prison.
Once one of the world’s leading digital currency exchanges, Mt. Gox collapsed in 2014 in the wake of an alleged significant hack, resulting in fatal losses for the company. The subsequent bankruptcy process has left countless investors out of pocket ever since, still awaiting settlement in respect of the money they lost on the exchange.
United States District Court judge Gary Feinerman said that ruling otherwise would result in 30,000 individual trials, following the logic of the former CEO Karpeles in suggesting the claim would be better heard in Japan, according to a Law360 report.
Class certification is an essential prerequisite to any class action lawsuit, and is designed to make sure plaintiffs are sufficiently similar in the nature of their claims to be grouped together as part of a larger single case.
According to the judge, the claim depended on the alleged drafting and dissemination of the terms of use for the exchange, which lead plaintiff Gregory Greene said he “could not remember” seeing displayed on the website at the point of purchase.
Judge Feinerman said determining class certification would require individual assessment of all claimants to determine whether they read or understood the contents of the terms of use, and that this “cannot yield a common answer across all or even most of the class.”
“No reasonable fact-finder could simply assume that all or most of those users read or otherwise learned of the terms.”
“Holding over 30,000 mini-trials to determine how each class member understood, and whether each class member relied upon a contract they accepted nearly a decade ago would present insurmountable difficulties.”
The news comes as a boost to the firm’s former CEO, the second similar rejection of an attempt at class certification against the defunct exchange in the United States.
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