Many people are still seething over losing hundreds of bitcoins in the wake of Mt Gox’s collapse and the subsequent loss of up to 750,000 customer bitcoins in February of this year.
The Australian revealed that at least two Australians are part of a class action lawsuit that is being prepared by a London legal firm, Selachii, in order to recover the lost cash and Bitcoin.
Right now, the Japanese entity, Mt Gox KK, is protected from litigation by bankruptcy laws, while the CEO of Mt Gox, Mark Karpeles, is also seeking similar immunity under the US Chapter 15 bankruptcy law for himself, a US-based Mt Gox affiliate, and parent company, KK Tibanne.
Currently, investigators in Japan are preparing to release a report on May 9 on whether Mt Gox should be permanently liquidated or restored. The Selachii legal firm said it will act depending on the verdict of that report.
It also confirmed that it was representing at least two Australians in legal cases it was taking with Japanese lawyers in Tokyo.
Pantelis Roussakis from Coffs Harbour, said he had lost 222 Bitcoins, which he bought for $50,000-$60,000 back in December. Unfortunately, Mt Gox collapsed before he could convert them back to Australian dollars when they were valued at more than $260,000.
A Selachii spokesman said: “We are opposing that Mt Gox should be granted bankruptcy.”
Australians Strike Back
Another Australian, a young entrepreneur, Karl Kloppenborg, lost $47,000 in the collapse and is also awaiting word from Japanese examiners before taking up any legal action against Mt Gox.
“There’s no doubt that I will have to take out legal proceedings at some time, which is why I am taking the time to investigate it further,” Kloppenborg said.
“This was actually raw cash, it wasn’t even bitcoins, which is why I am angrier about it,” he added.
Kloppenborg also emphasized that the London-based Selachii firm was not his only option. “At the moment there’s a whole lot of talk within the Bitcoin community in Australia about developing a class action, however as it stands there’s no law firm looking to back it at the moment.”
“This is not a case of technical glitch. If you have a good hard look at the timeline of events that happened at Mt Gox, there are very clear ripples in the water that show there was another thing happening well and truly before this all happened.”
This certainly appears to be the case as Kloppenborg claims he was trying to get his money out of Mt Gox for three months prior to the collapse - and he wasn’t the only one. Instead, Mt Gox made him wait with others seeking to withdraw money claiming it could not keep up with processing the requests to cash out.
“What Mt Gox promised me is fairy dust,” said Kloppenborg.
A Global Front?
Meanwhile, other class action lawsuits have been in the works on other continents including Chicago-based Edelson firm as well as others in Canada and the UK.
While in the US, a claim and counterclaim has been under way in Seattle between Mt Gox and US venture company CoinLab, which is claiming that the Japanese exchange had breached the terms of the contract.
The complete scope of the backlash against Mt Gox remains to be seen as some potential litigants are awaiting word on the issue of immunity prior to spending money on legal action.
Finally, the president of the Bitcoin Association of Australia, Jason Williams, said it was “unfortunate how events had unfolded with regard to Mt Gox,” and “terrible that a once trusted member of the community had to exit in such a way.”
Williams said that Mt Gox was only one among the many exchanges in the world and while it has had an impact on the Bitcoin community, its implosion was generally viewed as “a bad actor exiting”.
Williams concluding by stating there are “various reputable places in Australia from where you can purchase Bitcoin, including Bit Trade Australia and CoinJar”.