Many Mt. Gox investors now have no hope to recover their cash

A class-action lawsuit brought against the Bitcoin trading post has been dismissed, leaving investor hopes in ashes.
Written by Charlie Osborne, Contributing Writer

The hopes of almost 100 former Mt. Gox investors from Canada are now in the dust thanks to the dismissal of a class-action lawsuit launched in hope of recovering money lost through the Bitcoin exchange.

When popular Bitcoin trading post-Mt. Gox unexpectedly closed its doors in February 2014, millions of dollars' worth of the virtual currency Bitcoin went down with it.

Mt. Gox CEO Mark Karpeles originally blamed the closure on a devastating cyberattack, but as the story unfolded, Karpeles was arrested in Japan and accusations of fraud were levied against the executive.

Mt. Gox filed for bankruptcy in both the US and Japan -- where the trading post was registered -- and Karpeles came under suspicion after 200,000 Bitcoin were recovered from a "misplaced" wallet. The former CEO is still being held by Japanese authorities and an investigation into embezzlement and fraud is ongoing.

The saga affected users of the Bitcoin trading post worldwide and several class-action lawsuits were filed. Canadians were amongst the mix, and now it seems there is little chance of them ever receiving a cent.

According to the law firm representing these investors in the lawsuit, Charney Lawyers PC, the case will be dismissed (.PDF) on 17 June 2016.

"This action will be dismissed on consent of all parties," the statement reads. "Claims are not proceeding against any party."

The class-action lawsuit originally set out to claim $500 million in compensation against Mt. Gox, parent company Tobanne, the Mt. Gox chief, Mt. Gox's former bank, Tokyo-based Mizuho and the website's founder Jed McCaleb.

However, the ongoing disputes and charges against various parties across the US and Japan have made the situation complicated, and Canadian law has made the possibility of a victory uncertain.

Should the case have been pushed forward and lost, it could have made the former investors bankrupt as they would be required to pay the court fees.

The lawyer handling the case, Ted Charney, shed some light on the decision to withdraw the claim. Talking to Motherboard, the lawyer said:

"In Canada, if you lose a case then you pay the winner's cost, and in this case, the cost would have been in the millions of dollars [...] unfortunately the realities of this litigation, with everybody going bankrupt, and the remaining parties being in Japan, made it very problematic."

Former investors do have the option to file individual lawsuits, but these are no longer the responsibility of the law firm and so must be done so in accordance with the jurisdiction of the person's home.

Considering how long the saga has continued, time may be running out -- but this is the only option left for investors who wish to take Karpeles to task.

10 things you didn't know about the Dark Web

Editorial standards