A US court judge has tossed the appeal of Mark Karpeles, the former CEO of the now-defunct crypto exchange Mt. Gox, for dropping fraud allegations against him.
The US District Judge Gary Baseman ruled in favor of Gregory Greene, the last remaining plaintiff battling a class-action lawsuit against Karpeles, on Tuesday.
Greene filed a complaint on behalf of bitcoin users in a US district court in Philadelphia, accusing Mt. Gox and its CEO Mark Karpeles of negligence and fraud for not protecting the exchange from theft.
Greene, who claimed his own bitcoin holdings were about $25,000, said Mt. Gox failed to provide its users with the level of security protection for which they paid.
Karpeles argued in court that the plaintiff altered his original arguments, bringing a host of new allegations. He also questioned the US court’s jurisdiction and filed a motion asking the judge to dismiss the lawsuit.
“Greene merely added detail with the aid of discovery, ” the judge said. “That does not violate the rule against altering the factual basis of a claim on summary judgment.”
The plaintiff opened an account with Mt. Gox in 2012 and falls victim to the exchange’s withdrawal issues continued from late-2013 until mid-2014 when the exchange finally shuttered.
Karpeles’ failed attempts in the court of law
In a long court battle in a Japanese court, Karpeles was found guilty for manipulating data and was sentenced to a suspended jail term. But the court acquitted of charges of embezzling millions from client accounts.
Karpeles, however, appealed against the court decision in another Japanese court which recently threw out his petition and upheld the conviction on charges of manipulating electronic data.
Meanwhile, Mt. Gox creditors are still in line to receive their blocked funds, but the court-appointed trustee is also controversial due to his unusual movement of massive amounts of funds in exchanges for liquidation, effecting the spot prices.