Bitcoin: Mt. Gox case could come to an end after petition from former CEO

  • Mark Karpeles, former CEO of Mt. Gox, petitions to end the long legal battle in court.
  • The petition is based on the false testimony given by one of the parties in the case. 

The long legal battle over the defunct Bitcoin Mt. Gox exchange could come to an end. Former CEO Mark Karpeles filed a petition with the Chicago court handling the case. Karpeles asked that the charges be dropped without further legal proceedings. His petition is supported by Gregory Greene’s confession of claims that turned out to be false.

Mt. Gox was one of the biggest cryptocurrency exchanges in the world. The company was based in Tokyo, Japan and was established in July 2010. At its peak, it processed nearly 70% of the transactions that were executed with Bitcoin around the world.

The exchange was the subject of an attack in 2014. Hackers managed to breach security and steal over 850,000 BTCs. According to the price of Bitcoin at the time, the attackers stole an approximate amount of 450 million dollars. The attack resulted in the closing of the exchange. The company had to ask for the protection of its investors and started a liquidation process. Although it was able to recover 140,000 BTCs, the exchange faced legal action and never recovered.

Dismissal of the Bitcoin Mt. Gox exchange case

In a document filed in Chicago federal court on January 8, 2020, the defendant on behalf of Karpeles filed a motion for summary judgment. According to the document, the defendant argues that the lead plaintiff, Gregory Green, confessed that the initial arguments supporting the case were false.

If the motion for summary judgment is granted by the court, the case could proceed without the need for a full trial. Karpeles’ legal representation argues the following:

After the resolution of the claims against the other defendants in mid-2018, rather than withdrawing claims based on allegations that Mr. Greene readily admitted in subsequent discovery were not true or unsupported, Mr. Greene doggedly pursued these claims. The time has come to end this litigation in its entirety.

Karpeles’ legal representation will seek a summary trial on all charges filed. The defendant claims that there is no evidence to support that the former CEO of Mt. Gox traded, converted, moved or assumed control without authorization over any Bitcoin in the custody of the exchange.

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In addition, Karpeles’ lawyers claim that the plaintiff has no evidence to support the lack of security measures for the exchange at the time of the attack. According to Karpeles, the plaintiff contradicted himself during the initial arguments, another reason for dismissing the charges and proceeding to a summary trial.

In October last year a Tokyo District Court approved the postponement of the deadline for the final preparation and implementation of the rehabilitation plan for Mt. Gox. The decision moved the deadline to March 31, 2020. Although the Chicago court’s decision is favorable to Karpeles, the victims of the robbery are still waiting for compensation for the lost investment and may see a response this year.

The PlusToken scam and the theft of $3 billion in Bitcoin

The history of cryptocurrencies is full of alleged price manipulations, impostors, scams, and hacking. Mt. Gox is one of the most important cases, but far from being the most recent. In the second half of 2019, the community was shocked by the PlusToken scam. A classic Ponzi scheme that led to the theft of $3 billion in Bitcoin and Ethereum.

Some of the perpetrators were caught. However, others managed to escape and despite best efforts, the movement of stolen funds remained unimpeded. A study by Chainalysis even attributed the bear market in the last quarter of 2019 to the liquidation of stolen funds. Although the study was questioned and the conclusions of the report only establish a correlation between the facts.

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About Author

Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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