Mt. Gox Chief Mark Karpeles’ Assets Seized by US Federal Judge

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Mt. Gox Chief Mark Karpeles’ Assets Seized by US Federal Judge
Mt. Gox Chief Mark Karpeles’ Assets Seized by US Federal Judge

Mt. Gox Chief Mark Karpeles’ Assets Ceased by US Federal Judge

Problems for Mt. Gox are far from over as a US federal judge temporarily froze the US assets of the Bitcoin exchange’s CEO Mark Karpeles’ assets. The court also allowed alleged victims of the collapsed Bitcoin exchange to demand evidence of what they claim is a massive fraud in the history of the digital currency.

Mt. Gox which had thought that it’s responsibility towards the investors or customers are over after filing for bankruptcy is now in crossfire as it is being attacked not just by the investors but by the regulatory agencies and judicial bodies as well. Also, despite the fact that the Bitcoin exchange claims it was hacked, opinions are that customers were cheated.

The company which once was the world’s largest Bitcoin exchange ceased operations last month and then filed for bankruptcy. However, the latest decision on the part of the US Federal court does not seem to have been convinced by the arguments. Now the court has decided that the assets of Karpeles be ceased.

Earlier, Mt. Gox said it may have lost 750,000 Bitcoins, worth hundreds of millions of dollars, in a hacking attack; however, it did not clear what would it do to pay to its customers who invested. Now, the order to freeze on Karpeles’ assets, issued by Judge Gary Feinerman in Chicago, is a step towards ensuring justice to wronged investors.

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Investors Feel Cheated, Call Mt. Gox Collapse the Biggest Fraud in Bitcoin History
The order from the federal judge also applies to Mt. Gox’s US affiliate and the Japanese parent company. However, the judge’s order did not apply to the Tokyo-based Mt. Gox KK as according to experts it was shielded from litigation after it filed for bankruptcy protection in Japan and the United States.

Once Mt. Gox collapsed and filed for bankruptcy the affected parties/investors filed for repayment. During a bankruptcy hearing earlier on Monday, parties suing Mt. Gox said there are growing concerns that Karpeles moved millions of dollars of Bitcoins in recent days based on information gleaned from the Internet.

The federal court took cognizance and ordered for freezing Karpeles’ assets. The appellants are claiming that it was a massive fraud on the part of Karpeles and Mt. Gox. Though Mt. Gox blamed the loss of hundreds of millions of dollars in Bitcoins on a flaw in the software algorithm that underlies the digital currency, it was ridiculed by the Bitcoin Foundation.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com