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Mark Karpeles Accuses Plaintiff in Mt Gox Lawsuit of Attempting to ‘Thwart’ Court


www.coindesk.com 18 March 2020 18:00, UTC
Reading time: ~2 m

The former CEO of Mt Gox has claimed the plaintiff holding him liable for losses incurred after the exchange collapsed breached precedent by changing the claims in his complaint.

In a motion filed with the federal court of the Northern District of Illinois Monday, Mark Karpeles claims Gregory Greene, who first sued in February 2014, changed the underlying basis for his claim in an attempt to "thwart" a motion calling for summary judgment.

Karpeles says Greene – who filed his initial complaint against Karpeles and Mt Gox the day the exchange declared bankruptcy – violated court precedent by bringing a "host of new factual allegations" not alleged in the original class action complaint.

"Mr. Greene doomed his fraud claim by directly contradicting the underlying allegations in his Complaint of the purported fraud or deception during discovery," reads the filing. "His addition of new allegations of fraud in response to a motion to summary judgment violates Seventh Circuit precedent."

The filing claims Greene changed his claim to include allegations from other complainants that signed up to the exchange on the basis of Mt Gox's Terms of Use, which assured users the exchange had enough cash and bitcoin to cover users' deposits.

Although Greene argued he has always said this was part of his complaint, Karpeles argued in the filing that this was "impossible, as [Greene's] creation of an account and making a deposit on the Mt. Gox Exchange preceded the existence of the Terms of Use by at least more than two weeks."

Karpeles has accused Greene of attempting to change his claim so it could stand up to summary judgment – a motion allowing a presiding judge to rule on a case before it goes to trial and usually granted in cases where the outcome is considered a foregone conclusion.

Greene's original complaint included three claims: the fraud claim, as well as since dismissed counts of negligence and conversion. Some original allegations, like a purported statement on the Mt. Gox website claiming the exchange was useful as a safe place to store bitcoin, were renounced at the original deposition.

Last March, a judge refused a motion by Karpeles to stay the U.S. case. In a separate case brought forward in Japan, Karpeles was cleared of charges of embezzlement and breach of trust but found guilty of manipulating exchange data.

Read the full filing below:

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