The story spinning around Mt Gox, Mark Karpeles and Jed McCaleb and their alleged Bitcoin fraud has enough spice in it to be called Daytime Soap. Each day brings in new twists and turns to the plot and has all of us hanging on the edge of our seats. The latest development in the story is that folks in Canada and the U.S. have filed a class-action suit for fraud that kind of negates Mt Gox’s bankruptcy blanket for the moment.
Added to the roll call are Japan’s Mizuho Bank, “John Doe defendants” and Mark Karpeles. Let’s start with the U.S. first; the initial class-action suit was filed in late February but this weekend another primary plaintiff and new defendants were included to the case.
The ripple effect is mirrored in the suit filed by Canadian Bitcoin holders who have dragged in Mt Gox, its affiliates, the two major shareholders: Mark Karpeles and Jed McCaleb along with the Japanese Bank - Mizuho Bank.
We all know that Mt Gox KK has filed for bankruptcy protection under Chapter 15 but this cover does not extend to Mt Gox's executives, its parent company Tibanne KK, and the US subsidiaries.
Enough ink has been spent on outlining how things started to go wrong at this exchange. Around 750,000 Bitcoins that were in custody of the company were ‘lost’, leading to a loss of $468 million worth of Bitcoins. So we will not go into the history, just read up more info here.
The way their story has panned out, leads us to believe that the Canadian and US cases pointing out large-scale fraud, are factual. The Canadian suit is claiming $500 million from the defendants.
The news of a leaked conversation between a Mizuho Bank representative and Mark Karpeles, suggests that the banker asked Karpeles to close his account in the upcoming future. Perhaps the bank knows too much about the case.
The suits claim that there is some proof to suggest that Bitcoins from Mt Gox were transferred to new accounts and to those of the top brass. Arstechnica reports that 180,000 Bitcoins worth about $113 million dollars were moved through “Block Chain” and were eventually going to be mixed into other smaller accounts to avoid detection.