LOS ANGELES (Legal Newsline) – A bitcoin user alleges the owner of a bitcoin exchange is responsible for the loss of more than $400 million from users "through either gross negligence or outright theft."

Jonathan Carmel, individually and on behalf of all others similarly situated, filed a complaint on March 27 in the U.S. District Court for the Central District of California, Western Division against Mizuho Bank LTD and Mark Karpeles alleging negligence, fraud and tortious interference with contract.

According to the complaint, Karpeles owned and ran Mt. Gox and Mizuho Bank was the banking partner. Mt. Gox was founded in 2009 and was a bitcoin exchange. The plaintiff alleges he joined Mt. Gox in March 2013 and "paid transactions fees to Mt. Gox on every trade that he made, in part, to be able to buy, sell, trade and withdraw bitcoins, and also, in part, to maintain and protect his bitcoins."

The plaintiff alleges in November 2013, he converted the bitcoin into Fiat currency to withdraw $52,493.22 from his Mt. Gox account, received a notice in February 2014 that all international withdrawals were delayed, and that Mt. Gox "went dark" shortly afterward.

The plaintiff alleges that bitcoins and Fiat currency were "accessed, frozen, stolen, and/or misused as the proximate result of Karpeles’ failure to exercise reasonable care in safeguarding such information by adopting, implementing, and maintaining appropriate data management, accounting, and security measures."

The plaintiff alleges that had he known "that his ability to make cash withdrawals from the exchange would be materially compromised, that the security of Mt. Gox had been compromised, or that Mt. Gox intended to go offline and declare bankruptcy, he would not have opened his account with Mt. Gox or transferred bitcoins into the exchange, and/or would have taken immediate steps to withdraw his bitcoins from the exchange," the suit states.

The plaintiff requests a trial by jury and seeks judgment for actual damages, attorneys' fees, costs, award of punitive or exemplary damages, interest and such other and further relief that the court deems reasonable and just. He is represented by Rafey S. Balabanian and Aaron Lawson of Edelson PC in San Francisco.

U.S. District Court for the Central District of California, Western Division case number 2:18-cv-02483-JAK-E

Want to get notified whenever we write about U.S. District Court for the Central District of California Western Division ?
Next time we write about U.S. District Court for the Central District of California Western Division, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

U.S. District Court for the Central District of California Western Division




More News