Former customer of MtGox fails to have class certified in lawsuit against Karpeles, Mizuho

Maria Nikolova

The Court has found that Joseph Lack has failed to show that common questions will predominate in resolving his claim as a class action.

There are several lawsuits in the United States related to the collapse of ill-fated Bitcoin exchange MtGox. The plaintiff in one of these cases – Joseph Lack, suffered a defeat earlier this week, as he failed to have class certified in an action targeting Mark Karpeles and Mizuho Bank.

Joseph Lack has brought a legal action in California and has been seeking class certification, so that others in a similar situation could join the lawsuit. Mizuho Bank has objected to the proposed certification.

In a minute order signed on April 30, 2019, Judge R Gary Klausner of the California Central District Court, denied Lack’s motion for class certification.

Lack 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.

After Mt. Gox’s Japanese bankruptcy was converted to a civil rehabilitation proceeding in June 2018, Lack filed a Proof of Rehabilitation Claim in October 2018 in the total amount of $50,362.73, including over $10,360 in “delay damages” from February 26, 2014 when Mt. Gox stopped operating until June 21, 2018. On March 20, 2019, Lack received notice from the Mt. Gox Rehabilitation Trustee that his claim was disapproved “on the ground that such amount does not exist.”

On March 25, 2019, Mizuho Bank, Ltd. submitted a memorandum of law in opposition to plaintiff Joseph Lack’s motion for class certification. The main argument of the bank is that Lack’s situation is too specific. According to the bank, Lack is unable to fairly and adequately protect the interests of other proposed class members. Also, Lack is said to have failed to present a reliable class-wide method to determine damages for all the members of the putative class tied to his theory of liability.

The Court has apparently sided with the bank.

In the Order issued earlier this week, the Judge said the plaintiff has failed to show that common questions will predominate in resolving his claim as a class action. The Court finds that Plaintiff has failed to meet his burden. The Court, hence, denies without prejudice the plaintiff’s Motion for Class Certification. 

Read this next

Retail FX

US Retail FX brokers suffer steep fall in client deposits, Trading.com racked up $46K

Retail FX deposits at US brokerages, which have been struggling to eke out a profit in a strict regulatory environment, dropped in March 2022 by $35 million, CFTC data showed.

Retail FX

eToro supports Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI)

Israeli social trading network eToro has added support for trading three new tokens. Immutable X (IMX), Livepeer (LPT) and Cartesi (CTSI) are the next coins to join eToro’s list of featured digital assets.

Executive Moves

LiquidityBook hires Fintech veteran Jonathan Cross to lead EMEA business

LiquidityBook, a provider of FIX and OMS trading solutions for both the buy and sell-side, has added Jonathan Cross to its business team for the EMEA region.

Retail FX

Interactive Brokers’ traders now have direct access to TradingView

Professional charting and trading platform, TradingView has integrated the US-listed brokerage firm Interactive Brokers as the latest online trading partner.

Digital Assets

This Web3 infrastructure provider is on the verge of a radical upgrade

The crypto industry fueled the anticipation of the arrival of web3 with the introduction of Decentralized Finance, Metaverse, and more. And today, that web3 is finding support from various developers looking to build and develop the space to extract the most benefits out of it.

Digital Assets

Crypto bots: trading assistant 

The cryptocurrency market is a volatile one, with huge gains and dramatic dips. However, the most informed traders can use automated tools to maximize profits while minimizing risks. 

Retail FX

Cryptos Seed Review – What Makes This Broker Stand Out (2022)

Read our Cryptos Seed review today to learn all you need to know about Cryptos Seed before signing up with the broker(cryptos-seed.com) – by Finance Feeds.

Institutional FX

Citadel goes live with FX NDFs trades on LCH ForexClear

“This builds on the strong growth at the service, which has historically been driven by a focus on margin efficiencies that will only increase with Phase 6 of the uncleared margin rules in September 2022.”

Digital Assets

Crypto platform Bitfrost registers as VASP in Gibraltar ahead of DLT License

“We’re now looking at the next steps necessary to obtain authorisation to operate as a fully regulated DLT or Virtual Asset Service Provider.”

<