Mt.Gox Former Founder Faces Lawsuit

Mt. Gox founder, Jed McCALEB, is facing a lawsuit over his managing of the failed crypto exchange. The plaintiffs are former traders from the platform, Joseph JONES and Peter STEINMETZ. They allege that McCaleb’s actions were negligent and fraudulent. They blame his misleading behaviour to be the reason why they lost their Bitcoin when the exchange was hacked in 2014.

The issue was initiated by the former traders on May 19 with the submission to a California court. In the complaint, they claim that the exchange was already suffering from safety issues in January 2011, one year after their launch. These safety issues include two security breaches, which resulted in the loss of thousands of bitcoins.They claim that even though McCaleb was immediately made aware of the incident, he did not publicly disclose the hack or take action of any kind.

An excerpt from the complaint goes into more details on the allegations:

“Plaintiffs are further informed and on that basis allege, that McCaleb schemed with Karpeles about how to deal with the missing 80,000 Bitcoin and given the fact that Mt. Gox was already profitable in early 2011, that Mt. Gox would be able to easily recover or account for the missing 80,000 Bitcoin. These Bitcoin, and hundreds of thousands of more Bitcoin would either be stolen, lost, or otherwise, and never recovered by Mt. Gox.”

There is no information on the further course of the case. It is worth reminding that in March 2019, Mark KARPELES, the CEO of the exchange, was sentenced to prison.

Image courtesy of The Tokenist