Mark Karpeles wants to stay lawsuit brought by US clients of MtGox

Maria Nikolova

Karpeles argues that the Illinois Northern District Court should stay the case in light of civil rehabilitation proceedings in Japan that are likely to provide full recovery to former MtGox clients.

The legal proceedings related to the collapse of ill-fated Bitcoin exchange MtGox continue in the United States. On Monday, February 25, 2019, Mark Karpeles, filed a document with the Illinois Northern District Court seeking to stay one of the cases launched by former MtGox customers in the United States.

In the document, seen by FinanceFeeds, Karpeles moves the Court to stay the case in light of civil rehabilitation proceedings in Japan that are likely to provide full recovery to the plaintiffs – Gregory Greene and Anthony Motto. In the alternative, Karpeles moves 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. Whether that will happen should be known within a matter of months, he says.

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. 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 nix 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”.

In his motion to dismiss, Karpeles insisted that, under binding Seventh Circuit law and the evidence submitted to the Court, the Illinois Northern District Court lacks personal jurisdiction over him, and the case against him must be dismissed.

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