Founder of Bitcoin exchange Mt. Gox, Mark Karpeles disputes U.S. fraud lawsuit

The fallout from the Mt Gox Bitcoin theft of 2014 continues, as its founder rebuffs the latest legal case…

by Manoj Sharma for CNR

The founder of now-defunct Bitcoin exchange Mt. Gox, Mark Karpeles, has urged a U.S federal judge in the state of Illinois to dismiss the fraud lawsuit brought on by two former clients, insisting that the U.S court doesn’t have personal jurisdiction over him in Japan.

The accusations are in relation to the bankruptcy of Mt. Gox, with an implication of hacking and embezzlement in 2014. At that time, Mt. Gox lost hundreds of thousands of Bitcoins that are now worth billions at today’s prices. Mr. Karpeles faced an entry of default case him on August 13th, when Judge Feinerman directed the court to name the-then CEO as the lead defendant. Karpeles was given until August 28 to oppose the claim.

On the day of the deadline, Mark Karpeles filed a motion to dismiss the case, by stating that he didn’t have ‘minimum contacts’ of established ties in Illinois.

As per Law360, the attorney of former MT. Gox CEO, told the U.S court judge, Gary Feinerman, that Mark Karpeles didn’t conduct any business in Illinois, and that he has no sufficient ties in the state to justify a lawsuit from disgruntled former customers who have accused him of fraud, conversion, and negligence.

Mark Karpeles’ attorney said in an excerpt to dismiss the claim:

“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.”

Karpeles’ attorney argued further:

“[He 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.”

Meanwhile, Mt. Gox has launched an online claim filing system last week for clients to claim the funds they lost four years ago. The list of all the accepted and rejected accounts will be published by the trustee, Nobuaki Kobayashi, on January 24th 2019.