The backlash from Mt. Gox’s recent bankruptcy filings is now at full throttle, and a new website is building a case against the Japanese exchange with the goal of ultimately filing a lawsuit to recover damages.
MtGoxRecovery.com has gathered information from over 1,600 customers who have lost funds in the aftermath of Mt. Gox filing for bankruptcy in both Japan and more recently in the US.
The website suggests that Mt. Gox CEO Mark Karpeles’ “completely irresponsible actions” have left many of the exchange’s customers with considerable losses, and MtGoxRecovery.com hopes to recover these funds with the help of a Japanese law firm.
Widespread losses
In addition to the 850,000 bitcoins that have gone missing from Mt. Gox, Karpeles revealed the company has more than $60m in outstanding debt owed to creditors and customers.
At one time the industry’s most popular exchange, Mt. Gox undoubtedly held a considerable number of bitcoins, and when the exchange halted withdrawals back in February, many worried that their funds would be forever tied up on Mt. Gox.
Message boards across the Internet have served as unofficial support groups for victims of Mt. Gox’s apparent insolvency. On reddit, an entire subreddit (r/mtgoxinsolvency) dedicated to following the downfall of Mt. Gox has garnered over 200 subscribers, many of whom have reported significant bitcoin losses on the exchange.
One thread dedicated to sharing “horror stories” from Mt. Gox’s bankruptcy was filled with anecdotes of loss:
Seeking justice
MtGoxRecovery.com was created by tech entrepreneur and Bitcoin Foundation lifetime member Olivier Janssens, who claims to have personally lost more than $5m as a result of Mt. Gox’s questionable operations.
Janssens said he spoke directly with Karpeles in the months before Mt. Gox halted transactions and filed for bankruptcy, and stated in no uncertain terms that he believes Karpeles has acted criminally:
“Mark knew I was a major stakeholder in the bitcoin community, and we discussed solutions for three hours to try to resolve this. At that time he kept telling me he could only send me a very limited amount per month, due to anti-money laundering issues. Obviously, this was a lie.”
One of the major concerns that Mt. Gox customers have consistently voiced is about the exchange’s lack of transparency in its operations, particularly in recent weeks when Mt. Gox halted transactions and eventually filed for bankruptcy.
At this stage, however, there is no official evidence that Karpeles has acted illegally in any way.
Janssen pointed to the recent speculation surrounding the movement of $113m around the block chain and how many believe this money is linked with or even owned by Mt. Gox as evidence of Karpeles’ unethical obfuscation of information.
Speaking to CoinDesk, Janssen said:
“It’s very concerning to see assets moving [throughout the block chain] during civil rehabilitation. The legality of it is questionable to say the least, and it should not be done without clear communication to the creditors. Being completely transparent at this point is essential, and this is something that has been lacking at Mt. Gox since the beginning. People should not be given any false hope, nor should extra uncertainty be added.”
Building a case
Together with its lawyers in Japan, MtGoxRecovery.com claims it will file a lawsuit that will “try to recover as much as possible, and additionally press criminal charges against Mark Karpeles personally.”
Janssen says that the website has gathered a substantial amount of information from users that have signed up as plaintiffs in the lawsuit, and in cases where the information is critically important, they plan to pass their case along to the police as well.
One area of focus for MtGoxRecovery.com and its users is Japanese bankruptcy law. Janssens plans to offer a public information session on the subject this week for users who have signed up on the website.
The time and date of this session is yet to be announced, but considering the large number of people who have lost bitcoin on Mt. Gox, the demand for more information is clearly substantial.
Lawsuit image via Shutterstock