US client of MtGox fails to revive lawsuit against Mark Karpeles

Maria Nikolova

Judge Nancy D Freudenthal finds the motion by the plaintiff is untimely.

An attempt by a former customer of MtGox to revive an action against Mark Karpeles has failed, as the Court has found the motion was a little too late.

The plaintiff in the case – David Justice, brought an action against Mizuho Bank, Ltd. and Mark Karpeles, seeking to recover losses he and others sustained following the sudden collapse of the Mt. Gox bitcoin exchange. The case was filed about a year ago – in March 2018.

On November 13, 2018, and after full briefing from Mizuho and Justice, the New Mexico District Court granted Mizuho’s motion to dismiss over lack of personal jurisdiction.

On March 4, 2019, Justice submitted a motion to reopen the case against Karpeles, stating that the Court’s dismissal of the case against Mark Karpeles for want of personal jurisdiction was based on a clerical error. Justice sought that the Court reinstates his claims against Mark Karpeles.

The latest court filings in this case show that this motion by the plaintiff did not succeed. Judge Nancy D Freudenthal denied the request.

The Judge explained that the plaintiff had waited more than four months to seek relief from the Judgment as to the claims against Mark Karpeles. The Court found this motion is untimely, as motions to vacate mistakes of law are governed by the thirty day appeals deadline.

Let’s note that there are a number of lawsuits brought by US clients of MtGox. Most of them target Mizuho and Karpeles. In a recent ruling in the case brought by Gregory Greene in the Illinois Northern District Court, Judge Gary Feinerman nixed an attempt by Mark Karpeles to dismiss the action against him.

The plaintiffs in the case – Gregory Greene and Anthony Motto, seek on behalf of a putative class to hold Mark Karpeles, Mt. Gox’s principal liable for financial losses allegedly arising from the exchange’s collapse. The plaintiffs are bringing state law claims that sound in conversion/trespass to chattels, negligence, and consumer fraud. Their complaint alleges that Karpeles intentionally misrepresented the security and stability of the Mt. Gox exchange and that his negligent or intentional failures in designing and operating the exchange allowed the loss of the plaintiffs’ assets. On behalf of a putative class, the plaintiffs seek actual, statutory, and punitive damages, along with prejudgment interest and attorney fees.

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