Mark Karpeles fails to have US lawsuit against him stayed
The attempt by the head of ill-fated Bitcoin exchange MtGox to stay a US lawsuit due to civil rehabilitation proceedings in Japan hits the curb.
The recent motion by Mark Karpeles to stay a US lawsuit against him in light of civil rehabilitation proceedings in Japan did not see a reaction of support from the Court.
On February 28, 2019, the Honorable Gary Feinerman of the Illinois Northern District Court ruled that Karpeles’s motion to stay the case based on impending mootness, or in the alternative to strike class allegations is granted in part and denied without prejudice in part. The deadline to serve responses to any already-served written discovery requests was extended to may 15, 2019. The motion otherwise was denied.
Several days ago, Karpeles moved the Court to stay the case in light of civil rehabilitation proceedings in Japan as, according to him, these proceedings are likely to provide full recovery to the plaintiffs – Gregory Greene and Anthony Motto, former customers of MtGox. In the alternative, Karpeles moved to strike the class allegations in the plaintiffs’ Fourth Amended Complaint because, according to the defendant, a class action is not the superior method to resolve this controversy.
Gregory Greene and Anthony Motto seek to hold Karpeles personally liable for any losses they sustained from their investments in bitcoin on the Mt. Gox exchange that they could not recover as claimants in Mt. Gox’s bankruptcy proceedings.
Karpeles argues 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 the plaintiffs and others will obtain a full recovery in Mt. Gox’s Japanese legal proceedings is high. According to the defendant, the case should be stayed in order to conserve judicial resources and to preclude unnecessary legal expenses. In the alternative, the Court should strike the class allegations, as a class action is not the superior method to adjudicate this controversy, according to Karpeles.
Let’s recall that, in January this year, the Court indicated that it will dash the defense claims made by Mark Karpeles in a case brought by former MtGox clients. In a brief notice filed on January 11, 2019, the parties in the case were directed to “proceed on the assumption that Defendant Karpeles’s motion to dismiss will be denied”.
