Wednesday, July 30th30.4°C
21450
21900

Canadian lawsuit to seek $500 million from exchange as bitcoins go missing

TORONTO - A proposed class action announced Friday it will seek $500 million in compensation for Canadians with deposits in what was once the largest bitcoin digital-currency exchange in the world.

The lawsuit targets Mt. Gox and its two owners, Mark Karpeles and Jed McCaleb, as well as a one of the largest banks in Japan, according to a notice of action to Ontario Superior Court.

The Mt. Gox Bitcoin halted all withdrawals early last month, then abruptly shut down. Earlier this week, it filed for bankruptcy protection in the United States.

The online exchange had already filed for bankruptcy in Japan, saying it may have lost bitcoins belonging to 750,000 of its customers.

Karpeles has said computer hackers took advantage of the exchange's flawed software, a security breach critics said may have persisted for years.

Toronto litigation lawyer Ted Charney said Mt. Gox held an estimated US$465 million in trust for its clients and millions of dollars belong to Canadian users.

The company has offered no accounting for how much non-bitcoin currency it held or what happened to money that was supposed to have been held in trust, he said.

"We're never going to find out what's going on unless we start a lawsuit because it's the only way we're going to get access to the records," Charney said in an interview.

"It's really the only way to get the thing going."

The notice of action, a summary of the case, gives lawyers a month to file a substantive statement of claim.

The Canadian action also names Mizuho Bank on the grounds that the Japanese financial institution held an account with non-bitcoin currency that was transferred from the personal bank accounts of users to the Mt. Gox exchange.

Charney said his firm is working together with the U.S. lawyers who are pressing a class action south of the border.

According to the Canadian suit, Mt. Gox had contracted to hold all money and digital currency deposits in user accounts.

The national class action seeks to represent Canadians who paid Mt. Gox a fee to trade bitcoins or who had the digital or other currency stored on the exchange when it went offline.

In Dallas on Monday, Mt. Gox lawyers said it needed bankruptcy protection to avoid irreparable damage from a proposed class action filed in Chicago federal court and a suit alleging breach of contract in Seattle.

The American plaintiff has secured an injunction freezing the defendants' assets and expediting discovery.

U.S. lawyers complain the case involves "massive fraud."

The Canadian Press


Read more Business News

22770


Recent Trending




Today's Market
S&P TSX15483.01+36.46
S&P CDNX1011.46-5.04
DJIA16870.90-41.21
Nasdaq4457.978+15.28
S&P 5001968.47-1.48
CDN Dollar0.9175-0.0041
Gold1310.00+6.70
Oil100.30-0.67
Lumber323.90+1.90
Natural Gas3.73-0.017

 
Okanagan Companies
Pacific Safety0.175-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.200.00
Cantex0.085+0.02
Anavex Life Sciences0.251-0.0165
Metalex Ventures0.085+0.005
Russel Metals35.04-0.25
Copper Mountain Mining2.82-0.04
Colorado Resources0.22-0.005
ReliaBrand Inc0.10+0.019
Sunrise Resources Ltd0.035+0.015
Mission Ready Services0.15-0.005

 



22439

FEATURED Property
18758581050 Springfield Road
3 bedrooms 3 baths
$300,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Take charge of your debt

Photo: Thinkstock.comWays to reduce your Debt:Make a budget and get budget counselingA basic first step for debt reduction is to prepare a budget and plan your spending. Once you have a budget, you mu...


Geopolitical tensions rattle markets

The Big Picture Geopolitical tensions rattle markets The spectre of rising geopolitical tensions in Ukraine and Gaza cast a shadow over an otherwise positive week in the markets. News that a passenger...


Learn to delegate effectively

Photo: ContributedI have the pleasure of witnessing people delegate tasks quite often. Sometimes with tremendous success and sometimes with disastrous consequences. I have chaired a lot of committees...

_








Member of BC Press Council


22758