Ex-Mt Gox Traders Accuse Stellar Co-Founder of Losing 80,000 BTC

Reading Time: 2 minutes

Mt Gox was one of the biggest disasters in the history of crypto and it will forever be known as one of the biggest crypto mysteries. The story of Mt Gox is still rumbling on and new pages are being written every day, and two ex-Mt Gox traders are looking to add a new page to the history books. Joseph Jones and Peter Steinmetz are trying to sue Jed McCaleb – Mt Gox creator and Stellar co-founder – for selling Mt Gox to Mark Karpeles knowing it had glaring security flaws. In the lawsuit, Jones and Steinmetz claim that McCaleb should be held responsible for the loss of more than 80,000 BTC.

Knowingly Selling Mt Gox Full of Bugs

If the lawsuit is successful and the court finds McCaleb guilty of covering up security concerns as well as failing to disclose them at the time of sale, then McCaleb could find himself in a lot of hot water. The lawsuit states: “McCaleb was aware of the Mt. Gox’s security issues back in late 2010 or early 2011. Rather than secure the exchange, McCaleb sold a large portion of his interest in the then sole proprietorship, and provided avenues to the purchases to cover-up security concerns at the time without ever informing or disclosing these issues to the public.”

If this damning account is correct, Mark Karpeles could very well manage to get off the hook for a large portion of the charges levied against him by creditors as it backs his plea of not guilty in the recent court case.

Secrecy Flowing into McCaleb’s New Ventures

This lawsuit brings a lot of past anger from the crypto community back to the table, and if McCaleb was so secretive about major security flaws then, could he be up to old tricks again? Stellar – McCaleb’s new project – recently suffered a bug exploit where 2.25 billion XLM tokens were created. Stellar quickly burnt the same number of tokens from its own supply and patched the bug, but refused to tell the world about the attack. This same level of secrecy is starting to rear its ugly head once more, and could land McCaleb in further hot water. These 2.25 billion tokens are still in the hands of the hacker and Stellar failed to even try to recover them over fears of alerting the community. If traders get wind of this, then they too could file a suit against McCaleb for hiding vital information.

Whatever the true story is, the courts will get to the bottom of the matter in the court case. Hopefully this is just the result of two angry ex-Mt Gox traders looking to grind an axe, but if it turns out to be true then we could have a new crypto villain on our hands.