California Court grants more time to ex-MtGox clients to effect service on Mark Karpeles

Maria Nikolova

The Honorable R Gary Clausner has given the plaintiffs in a case against Karpeles until January 4, 2019, to effect service on the former head of MtGox.

There are a number of lawsuits brought by ex-customers of MtGox in the United States, with the proceedings being rather complicated due to recently started civil rehabilitation proceedings in Japan and the difficulty of actually proving that Mark Karpeles, the former head of the notorious Bitcoin exchange, may be sued in the United States.

Plaintiffs in one such case, which targets Mark Karpeles and Mizuho, have secured extra time to serve Karpeles. Earlier this week, the Honorable R Gary Clausner of the California Central District Court, signed an order extending the time for serving Karpeles. Thereby, the Judge granted a motion by one of MtGox’s customers – Joseph Lack.

The plaintiff has initiated the process of serving Karpeles in Japan. Japan’s Ministry of Foreign Affairs has confirmed that it has received all required documents and is in the process of accomplishing service on Karpeles. However, service has not been effected on Karpeles. Further, the Ministry of Foreign Affairs will not provide updates on their progress.

Hence, Lack has argued that service is not possible for the time being, and has requested that the Court extend the time in which to file a proof of service as to Mark Karpeles by three months, and not dismiss his claims against Karpeles for lack of prosecution.

The Court, having considered the application, found good cause to extend the deadline to file proof of service. The time for the plaintiff to file Proof of Service on defendant Mark Karpeles is extended to and through January 4, 2019.

Joseph Lack, who brought this action, is a resident of California. He joined Mt. Gox in January 2014. Upon joining, he wired $40,000 to Mt.Gox’s Mizuho account. Mizuho accepted the transfer and collected the transaction fee. On February 24, 2014, the website of the exchange went unresponsive. Lack waited in vain for his deposit to appear in his Mt Gox account and he did not succeed in getting his money back.

Accordingly, Lack brought an action against Karpeles and Mizuho. Lack alleges that Mizuho had a duty to disclose material information to him and the other depositors. Also, the plaintiff accuses Mizuho of intentionally defrauding him by concealing that the bank was no longer accepting withdrawal requests. Furthermore, the plaintiff alleges that Mizuho caused him damage.

In August this year, the Court denied Mizuho’s motion to dismiss the action for lack of jurisdiction.

The case, captioned Joseph Lack v. Mizuho Bank, Ltd., et al (2:18-cv-00617), continues at the California Central District Court.

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