Mt. Gox Class Action Lawsuit Fails

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  • A Mt. Gox class action lawsuit against former CEO Mark Karpelès has failed
  • A U.S. District Court judge ruled that the class action suit does not meet the threshold of similarity
  • Mt. Gox class action lawsuits are still ongoing in other states

A class action lawsuit against Mt. Gox and its former CEO Mark Karpelès will not go ahead after a U.S. District Court ruled that the individual cases within the class action were too disparate. Judge Gary Feinerman ruled on Tuesday that the case would require 30,000 “mini trials” to confirm whether the cases were similar enough to be wrapped up into a single action. Judge Feinerman has been presiding over the case since it was filed in 2018, a case he refused to dismiss in August 2019 at Karpelès’ request.

Karpelès Wins Despite 2019 Setback

The case refers to the infamous Mt. Gox hack of 2014, which is being dealt with primarily in Tokyo. However, lawsuits from U.S. customers not satisfied with events in Japan have sprung up in recent years, one of which was brought by former Mt. Gox customers Gregory Greene and Anthony Motto on behalf of thousands of U.S. customers.

Karpelès tried in 2019 to get the case dismissed on the basis that the court didn’t have jurisdiction over him, but Judge Feinerman disagreed, saying that the virtual presence of Mt. Gox, coupled with the 7,056 accounts held by Illinois residents, meant that it did have jurisdiction over him.

Mt. Gox Class Action Suit Fails Similarity Test

Two years later however and that point is moot, given that the lawsuit will now not progress after all. Class action lawsuits have to pass a threshold of similarity to ensure that the cases of the individual plaintiffs are close enough to each other to warrant a class action suit. Judge Feinerman felt that this wasn’t the case, stating that without separate trials for each person there was no way of knowing how many of the plaintiffs read and understood the terms and conditions of the site, which was key to attributing responsibility.

While this case may be closed, at least for now, Karpelès faces a second class action lawsuit in Pennsylvania which has been making its way through the legal system for two years. Karpelès was found not guilty of embezzlement in the Mt. Gox case in March 2019.