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Ex-Mt. Gox CEO Appeals for Dismissal of Fraud Charges

Mark Karpeles, the former CEO of now-defunct Mt. Gox, has moved to court, attempting the dismissal of a class-action suit filed against him by the victims of the collapsed exchange.

According to the documents filed on Wednesday in an Illinois district court, Karpeles is demanding a summary judgment relieving him of all charges.

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Gregory Greene, the primary plaintiff of the class action suit, sued Karpeles in 2014 amid loss of his holdings stored at the now-defunct exchange. He alleged that the ex-CEO was involved in “conversion,” and “negligence” or “consumer fraud.”

“Mr. Karpeles should be granted summary judgment in his favor for each of the three counts alleged against Mr. Karpeles in the operative Fourth Amended Complaint…namely Count I for conversion, Count II for negligence, or Count II for Consumer Fraud — for a host of reasons,” the recent filing by attorneys of Karpeles stated.

The doom of a Bitcoin giant

Karpeles ran the Bitcoin exchange from 2011 to 2014 as its CEO and was also its largest shareholder. Once the leading exchange in terms of Bitcoin trades, its popularity took a hit amid an attack in late 2011, resulting in the theft of 850,000 Bitcoin, then worth 450 million. This created a major dent on the books and business of the exchange and finally forced it to shut its trading operations in 2014.

As hundreds of creditors lost their holdings, many knocked at the courts’ doors while others are still waiting for a refund from the court-appointed rehabilitator.

Notably, last year a Japanese court held Karpeles accountable for data manipulation but acquitted him for embezzlement.

Per the recent filing, the plaintiff’s claims were loose and are not backed by any solid evidence.

“Mr. Greene has no evidence to support a claim for conversion,” the filing added.

“…for the negligence count, Mr. Greene has no supporting evidence and cannot recover under that theory for a purely economic injury…for the consumer fraud count, Mr. Greene directly contradicted the underlying allegations in his Complaint of the purported fraud or deception, thereby dooming his claim.”


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