Mt. Gox hit with class-action lawsuit

Following the hoopla surrounding bitcoin exchange Mt. Gox, one former user of the service has filed a class-action lawsuit against the service on behalf of users who were affected by the closure. The lawsuit was filed in Chicago by Gregory Greene, who is claiming both fraud and negligence on the part of Mt. Gox.

For his part, Greene is estimating his bitcoin stakes in Mt. Gox at approximately $25,000 USD, while the total reported loss of bitcoins by the service is substantially higher — to the tune of millions. Mt. Gox is located in Japan, but the firm that filed the suit isn't concerned about trying it in the United States, saying Mt. Gox's business and related in the nation subjects them to its jurisdiction.

Said Greene: "This catastrophic loss has not only revealed the instability of a burgeoning new industry, it has also uncovered a massive scheme to defraud millions of consumers into providing a private company with real, paper money in exchange for virtual currency."

It seems the biggest issue regarding the case is Mt. Gox's alleged failure to protect its customers. The debacle has spurred some calls for more oversight over bitcoin and related cryptocurrencies, and one senator used the occasion to send a letter pleading for an outright ban, expressing multiple concerns.

SOURCE: Coindesk and Bloomberg