Thursday, March 20, 2014

TRO Entered Against Mt. Gox in Class Action

I have admittedly fallen down on my self-appointed job of reporting on bitcoin litigation.  Somewhat belatedly, I provide an update on some of the litigation surrounding the collapse of Mt. Gox, one of the earliest, largest, and best-known bitcoin exchanges. 

On Feb. 27, 2014, a putative class action, Greene v. Mt. Gox Inc., Mt. Gox KK, Tibanne KK, and Mark Karpeles, No. 1:14-cv-1437, was filed in the Northern District of Illinois.  Subject matter jurisdiction was premised on the Class Action Fairness Act.  The complaint alleged counts for consumer fraud, common law fraud, negligence, and conversion, among other causes of action.

Two classes are proposed:

(1) Payment Class: All persons in the United States who paid a fee to Mt. Gox to buy, sell, or otherwise trade bitcoins.

(2) Frozen Currency Class: All persons in the United States who had bitcoins or Fiat Currency stored with Mt. Gox on Feb. 7, 2014.

On March 9, 2014, Mt. Gox Co., Ltd., which apparently is also known as Mt. Gox KK, filed a bankruptcy petition under Chapter 15 (foreign proceeding) in the Northern District of Texas, No. 3:14-bk-31229.  Under the automatic stay, the Greene proceeding was stayed against defendant Mt. Gox KK.

However, as against the remaining defendants, Judge Feinerman in the Greene case entered a temporary restraining order on March 11, 2014.  The court ruled that plaintiff had demonstrated a likelihood of success on the merits with respect to claims under the Illinois Consumer Fraud Act, common law fraud, negligence, conversion, and for an accounting, and restrained the defendants from selling, transferring, disposing of, or concealing any of their assets or records, including preservation of their web site. 

https://lawprofessors.typepad.com/civpro/2014/03/tro-entered-against-mt-gox-in-class-action.html

Class Actions, In the News | Permalink

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