The Illinois District Court has denied a motion brought forward by former Mt Gox CEO Mark Karpeles to dismiss a lawsuit against him.
The plaintiffs in the case, Gregory Greene and Anthony Motto, believe that Karpeles should be held liable for financial losses caused from the Mt Gox collapse.
Their complaint alleges that Karpeles had purposefully misrepresented both the security and stability of Mt Gox.
They also allege that his negligent or intentional failures in designing and operating the exchange allowed the loss of the plaintiffs’ assets.
The story so far
Mt Gox collapsed back in 2014 after it was revealed that the exchange had lost over 800,000 Bitcoin.
Mark Karpeles was CEO at the time of the collapse, and has been accused of moving 340 million yen ($3 million) from Mt Gox into his personal account as well manipulating data on the exchange.
His trial began in June 2018 following his release on bail in 2017. The condition of his bail stipulated that Karpeles could not leave Japan.
The Tokyo District Court is expected to reach a verdict on March 15th, 2019.
Charges in Illinois
Karpeles now also has to deal with a lawsuit against him in Illinois. FinanceFeeds reported that Karpeles had filed a motion to dismiss the case.
He insisted that under binding Seventh Circuit law alongside the evidence submitted to the court, the Illinois Northern District Court lacked the personal jurisdiction over him.
FinanceFeeds is now reporting that the dismissal request has been denied by Judge Gary Feinerman.
Judge Feinerman reportedly stated that Mt Gox had a virtual presence in Illinois. He estimates that roughly 7,056 (1.5%) of the addresses associated with Mt Gox accounts derived from Illinois.
Karpeles had claimed that the Illinois market was of no particular interest to him. Judge Feinerman has ruled that even in this circumstance, Karpeles purposefully availed himself of that market by operating an exchange that generated thousands of Illinois accounts.
The case will now continue at the Illinois Northern District Court.
Interested in reading more about the Mt Gox case? Discover how Mark Karpeles claimed innocence as his embezzlement trial approaches its end.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.