The former chief executive of the notorious and bankrupt Mt. Gox Bitcoin exchange, Mark Karpeles, has filed a supplement in response to a class-action lawsuit that was brought forward by the creditors of the exchange before the U.S. District Court. The supplement is actually one of two and it highlights the reasons why a class-action lawsuit will not be in the interest of the complainants. According to Karpeles’ legal representative, they already had a refund plan in place via the draft rehabilitation plan. As stated out in the draft, the rehabilitation plan will ensure that all of Mt. Gox’s creditors are paid back in the form of Yen, Bitcoin and Bitcoin Cash, depending on the current market valuation.
The attorney-at-law, Nobuaki Kobayashi is the witness of the draft of the rehabilitation plan. It was noted that in terms of current market value, Gregory Greene would be paid a total of $347,083 from 2.4 million worth of Japanese Yen, 6.33 BTC and 6.33 BCH. According to the lawyer, a class action lawsuit would make it difficult to sustain this potential payout. Gregory Greene is the name of the first publicized victim of the Mt. Gox exchange and he has chosen to take a legal step for reclaiming his lost crypto investment.
Steven Woodrow, who is a partner in Denver’s Edelson law firm, and the lawyer representing Gregory Greene, said that as of 2014, his client had reported an investment of about $25,000 in BTC when the Japanese traded crypto exchange had gone under. As per Chris Dore, another partner at Edelson, Greene’s case is just the first of many. The Mt. Gox fiasco is referred to as the largest crypto theft in the history of cryptocurrency, as it resulted in the loss of 850,000 BTC. Greene has accused the crypto world’s one-time unicorn to be negligent and fraudulent in secure the digital assets of its clients.
Jed McCaleb, former CTO and co-founder at Ripple Labs, founded the Mt. Gox crypto exchange in 2006 in Shibuya, Tokyo, Japan. Later, the ownership of the crypto exchange was passed on by McCaleb to Mark Karpeles, as he left to co-find the blockchain firm Ripple labs, based in San Francisco, United States. As cryptocurrencies gained momentum quickly, Mt. Gox began to handle 70% of the global Bitcoin transactions, which enabled it to become the largest crypto exchange in terms of trading volume.
However, a death-knell struck the exchange on Karpeles’ watch. Initially, the hot cryptocurrency wallet of the crypto exchange was compromised in which 25,000 BTC valued at $400,000 were stolen. The company did recover, but the theft of 850,000 BTC valued at $475 million proved to be the final nail in its coffin. Thereafter, Mt. Gox filed for bankruptcy, but not before hackers made away with the funds of investors. Mark Karpeles, the CEO, will face a suspended sentence of two and a half year, as long as he is not involved in any crime in the next four years.