Former Mt. Gox CEO Mark Karpeles to Face US Class Action
A US District judge has ruled that former CEO of failed bitcoin exchange Mt. Gox Mark Karpeles must face a class action lawsuit brought in Philadelphia over the firm’s collapse in 2014.
According to a Reuters report on Monday, District Judge Robert Kelly has refused Karpeles’ request to dismiss the suit, which alleges that the former CEO had concealed issues at the exchange from its users.
Former customer of Mt. Gox Gregory Pearce brought the case on his own behalf and others affected by the failure of the exchange. He alleges that Karpeles, who was the “sole controlling force” of the Tokyo-based exchange, knew there were “security bugs in the system but did not make these defects known to the public.”
Karpeles had argued that the Philadelphia court did not have jurisdiction in the case and sought a dismissal, however Judge Kelly rejected his argument on Friday
Earlier this year, Karpeles was found not guilty of most charges in a Tokyo criminal trial in which he was charged with embezzlement, breach of trust, and manipulating data on the exchange. He was found guilty only on the data charge.
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