Class Action Lawsuit Against MtGox?

The fallout continues to mount as MtGox not only continues to struggle in remedying the Bitcoin withdrawal situation, but also

The fallout continues to mount as MtGox not only continues to struggle in remedying the Bitcoin withdrawal situation, but also seems to remain largely unresponsive to client complaints.

Making their rounds well around the crypto web-sphere have been the stories of disgruntled clients personally making their way to MtGox’s offices in Tokyo in the search for answers, coming up empty-handed. Apparently, you can even view MtGox protests live here.

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The issue may now be taken to a whole new level, as one Bitcoiner is endeavoring to launch a class action lawsuit against the exchange:

I have contacted the offices of my law firm (REDACTED) in Tokyo to begin proceedings to sue Mt.Gox / Tibanne Ltd / Mark Karpeles for my USD funds.  He advised me that suing for USD is much more reliable than suing for BTC (since the price varies and bankruptcy collection on BTC has an unclear legal process).  Given the liquidations we see on MtGox we believe that there are likely other large plaintiffs filing suit, so we want to move quickly.

If you are interested in being co-plaintiffs in this suit, please PM me (I’m happy to split legal costs), and I will put you in touch with the partner I am dealing with.  Note that you will need to provide full proof of identification as well as proof of account ownership on Gox (to be provided to the law firm, not myself).

In general, a class action type suit is most likely to get us “smaller” holders a larger percentage of our funds than if we filed separate law suits.

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If it happens that Mt.Gox enters into bankruptcy (likely as a result of a preceding lawsuit), the firm is experienced in bankruptcy negotiations/law to maximize our tier on collections.  Hopefully we can collect before that because Japanese bankruptcy law is neither well defined nor quick.

We are looking to finish collecting plaintiffs by EOD Friday JST, and file a case as early as we can get the paperwork together next week.

The thread later mentions that lawyers request that plaintiffs should have at least $10,000 on the exchange (although the specification of dollar amounts would seem a contentious issue for Bitcoin holders watching their holdings wildly fluctuate in dollar value each day).

There has also been talk of MtGox’s solvency. One of the things this lawsuit aims for is getting precedence if MtGox goes bankrupt over other potential creditors.

Finally, the whole notion of legal recognition of Bitcoin comes into play. No government considers it legal tender. The question is: would a government consider it to be anything, considering governments’ hitherto reluctance to regulate or recognize it? Governments have been clear about their “use at your own risk” stance. Finland, on the other hand, has considered it a commodity. Or does the law of contract keep the issue afloat regardless of its economic status?

Answers to questions like these can set an interesting precedent if the lawsuit indeed takes off and the concept of cryptocurrency continues to thrive.

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