Still no update from Japanese public prosecutor regarding Mark Karpeles’ documents request

Maria Nikolova

The Illinois Northern District Court has sought the co-operation of the Japanese prosecution in a lawsuit brought by a customer of ill-famed Bitcoin exchange MtGox.

There has been little development in the lawsuit brought by Gregory Greene – a former customer of MtGox, against Mark Karpeles.

Let’s recall that the Illinois Northern District Court has instructed Karpeles to produce certain documents about the operations of the ill-famed Bitcoin exchange but he has refused on the grounds that he needs the permission of the Japanese prosecutor. In response, the Illinois Court has addressed the Japanese public prosecutor and asked for co-operation on the matter.

Earlier this week, the parties in the case filed a status report, which shows how little has changed with regard to discovery. To date, counsel for Karpeles has been informed that the order has been provided the Japanese public prosecutor, but has no information that the Japanese public prosecutor has issued any kind of response regarding the Illinois Court’s order.

As a result, Karpeles has not produced any documents implicated by the Illinois Court’s order.

Gregory Greene seeks to hold Karpeles accountable for conduct that led to the loss of more than $400 million from US users of the MtGox bitcoin exchange on theories of negligence, conversion, and fraud. The plaintiff alleges that, as the CEO of MtGox, Karpeles controlled all aspects of the exchange: he was responsible for the code underlying the exchange, knew of bugs and other security issues affecting the exchange, and controlled what information was disclosed to Mt. Gox’s customers.

Greene requests that Karpeles produces information all of which falls under the following categories:

  • Documents sufficient to identify witnesses relating to Karpeles’s operation of the Mt. Gox exchange;
  • Documents relating to Class members’ interactions with the exchange, along with their bitcoin and fiat currency holdings;
  • Documents relating to Karpeles’s ability to access and/or control Mt. Gox’s systems or user accounts, including his use of “bots” on the exchange; and
  • Documents relating to unauthorized exchange activity, whether resulting from “bugs” or “hacks”.

Each of these topics bears on the manner in which Karpeles, as the acting MtGox CEO from 2011 until 2014, operated the exchange and interacted with actual and potential customers of the Exchange.

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