Former Mt. Gox CEO Loses Motion to Stop Court Case Against Bitcoin Exchange Users and Investors

A few days ago, Mark Karpeles the former CEO of the Now-defunct exchange Mt. Gox, filed a motion to stay a current court case being brought against him.

When filing the motion, he stated that “through a series of events, notably the recovery of a significant amount of lost bitcoins and the rise in the value of bitcoins, the likelihood that Plaintiffs and others will obtain a full recovery in Mt. Gox’s Japanese legal proceedings is high.”

He also argued that pursuing such a case would be a waste of resources on tr part of the court and others.

“In light of the status of the Japanese proceedings, this case should be stayed in order to conserve judicial resources and to preclude unnecessary legal expenses,” he said.

No Deal

Unfortunately for Karpeles, his motion has been denied by Northern District of Illinois, judge Gary Feinerman and a status hearing has been scheduled for May 1, 2019.

The case being brought against Karpeles is from Gregory Greene and Anthony Motto, who have stated that they hold him personally responsible for the losses they suffered as a result of investing in bitcoin through Mt. Gox.

Mt. Gox, when it was in existence, was one of the most powerful exchanges in the world but filed for liquidation in 2014. The reason for this was that they had suffered a hack that cost them 850,000 bitcoins. Some funds were later found in a wallet that Mt. Gox management said they forgot about.

Trouble in Japan

Unfortunately for Karpeles, the upcoming status hearing in the United States isn’t the only thing he has to worry about. He is also facing trial in Japan where he is accused of using up to $3 million worth of customer funds for personal reasons.

In his closing arguments in a Japanese court last year, he pled innocent and claimed that the funds that were transferred to his account were part of official business. He had initially been looking at 5 years in prison for the embezzlement charges but is now looking at 10 Years instead.

While he has maintained that he did no wrong in both cases, he has publicly apologized to those who were affected by the hack that led to the closure of Mt. Gox.

“I never imagined things would end this way and I am forever sorry for everything that’s taken place and all the effect it had on everyone involved,” he said.