Richter Denies Box Certification in $ 400 Million Mt Gox Fraud Case

A federal judge has a certificate application from customers of the defunct Japanese Bitcoin exchange Mt. Gox, which was forced into bankruptcy in 2014 after a major hack.

Judge Gary Feinerman announced on Tuesday the

The move gave way to former Mt. Mark Karpeles, CEO of Gox, who has argued that a compensation plan in Japan would be better suited than litigation in the US.

Before a class action lawsuit can be initiated, the class action lawsuit must be certified to ensure that the plaintiffs have enough common ground to initiate a lawsuit against the defendant as part of a larger proceeding.

The judge argued that the lead plaintiff’s theory of fraud in the $ 400 million lawsuit involved the drafting and dissemination of Mt. Gox’s terms of use and alleged interpretations are misconstrued under Law 360.

Greene originally opened an account with Mt. Gox in early 2012 and claims to have relied on the representations contained in the exchange’s Terms of Use to assess the security of the platform.

In a June 2018 statement, Greene stated that he could not “remember” the terms displayed on the website. The judge argued that whether 30,000 users read or understand the contents of the Terms of Use “might not give a common answer for all or even most of the class”.

In essence, the class action lawsuit cannot be upheld unless there are similar circumstances for all plaintiffs, added Judge Feinerman:

“No reasonable search engine can simply assume that all or most of these users have read or learned about the terms.”

He added that even if all or most of Mt. Gox users are already aware of the terms, that doesn’t mean that all or most of what they were supposed to promise understood as Greene did.

“Performing more than 30,000 mini-tests to determine each class member’s understanding and whether each class member is relying on a contract they accepted nearly a decade ago will create trouble.

Connected: MT. Gox CEO stabs plaintiff to adjust fraud allegations mid-way through trial

This is Mt. The Gox client’s second attempt to obtain a box certificate after being rejected by Judge Feinerman in 2018 alleged at the time that the lead plaintiff’s testimony showed he was too vulnerable to the lawsuits.

The lawsuit launched over the Mt. Gox closure in February 2014 after they admitted they lost $ 400 million to BTC. In March 2019, Karpeles was acquitted of embezzlement but found guilty of forging financial records.